Festive season sees uptick in sales of passenger vehicles, two wheelers decline 6.31%

The Federation of Automobile Dealers Associations attributed overall sales to a good harvest, coupled with the Diwali-Dhanteras season, as well as the marriage season.
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The festive season saw retail sales of passenger vehicles in November go up by 4.17% year-on-year thanks to the festive season, data released by the Federation of Automobile Dealers Associations (FADA) showed. FADA attributed the overall sales for the month to a good harvest, coupled with the Diwali-Dhanteras season, as well as the marriage season. 

In the passenger vehicle segment, FADA said new launches and specifically compact SUV’s, continued to show good demand. Tractors too saw good growth. Month-on-month, tractors registered a growth of 48.7% and passenger vehicles saw a growth of 13.6%,

However, two-wheelers declined by 6.31%, commercial vehicles by 22.29% and three-wheelers by 60.27%. The decline of the latter three pulled down overall registrations by 4.74% in the 42-day festive period, FADA said. The festival period was from October 17, 2020 till November 28, 2020. 

Auto sales numbers reported by manufacturers are wholesale dispatches to dealers. FADA registration numbers reflect the number of customers who actually bought vehicles from the showroom, and hence get them registered with their Regional Transport Office (RTO). In this too, it is important to note that FADA’s data is from 1,265 of 1,472 RTOs, and does not include data from Andhra Pradesh, Telangana, Madhya Pradesh and Lakshadweep as they are not on Vahan 4 software in RTOs. 

Overall, vehicle registrations grew by 29.32% month-on-month but declined 19.29% year-on-year. Total sales across categories declined to 18,27,990 units compared to 22,64,947 units a year-ago.

Year-on-year, two-wheeler sales declined 21.4% to 14,13,378 units last month, as compared to 17,98,201 units in November 2019. Commercial vehicle sales fell 31.22% to 50,113 units as compared to 72,863 units a year ago. Three-wheeler sales fell 64.98% to 24,185 units last month from 69,056 units in 2019.

Tractor sales went up by 8.47% to 49,313 units as against 45,462 units in November 2019. Passenger vehicle sales went up 4.17% in November to 2,91,001 from 2,79,365 last year in the same period. 

Talking about the level of inventory, FADA said that the inventory levels for passenger vehicles is now closer to the recommended range at 25-30 days (recommended is 21 days), two-wheeler inventory is at 45-50 days.

FADA President Vinkesh Gulati said that the degrowth of 4.74% was much lesser than what they anticipated. 

“The 42-days festive period saw good traction in the current pandemic hit world as overall degrowth of -4.74% was much less than expectation. While registrations during Navratri were tepid, people came out in good numbers to purchase their dream vehicles during the Dhanteras – Diwali period. Tractor segment continued to gallop ahead. The fear of pandemic leading to safer means of travel for the entire family saw good sales in Passenger vehicles as it grew in double digits at 13.6%,” he said.

He added that the automobile industry has seen one of the best recovery rates since things began to open up and that while there is good growth month-on-month, the negative slide continues on a year-on-year basis. 

“With safer means of travel in the customer's mind and schools and colleges continuing to remain closed, demand for buses remains weak. Similarly, the M & HCV [Medium and Heavy Commercial Vehicle] segment continues to play spoilsport with excessive capacity, high prices of BS-6 models, finance issues and higher fuel prices,” he added. For this segment, he urged the government to increase spending and introduce an attractive scrappage policy. 

However, he warned that now with crop damage in many parts thanks to rains and floods as well as almost no pent-up demand reaming, revival of the sector falls solely on year-end schemes and that demand will be subdued. 

“If the supply chain issues in PV segment is controlled, we may see continued growth in December. FADA once again cautions 2W OEMs and Dealers to keep a check on vehicle inventory as post festivals, demand may remain subdued,” he said. 

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