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Vehicle retail continued to decline in September too, suggests new data

Vehicle registrations, which are a proxy for retail sales, declined 12.9% during September, as per the Federation of Automobile Dealers Association. Car registrations were down by 20.1%, while 2-wheeler registrations declined 12.1%.

, ET Bureau|
Oct 18, 2019, 02.23 PM IST
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AFP
Car-Sales-
Vehicle registrations in the country are a proxy for retail sales.
MUMBAI: Automobile retail in India registered a double-digit decline during the month of September, as per vehicle registration data provided by a body of retailers, indicating no respite for the industry amidst the ongoing demand downturn which is one of the worst ever.

Vehicle registrations in the country, which are a proxy for retail sales, declined 12.9% during the month of September, as per data compiled by the Federation of Automobile Dealers Associations (FADA).

Passenger vehicle (car) registrations were down by a massive 20.1%, while two-wheeler registrations declined 12.1%. Registration of commercial vehicles like trucks and buses too came down by 18.5%. Three-wheeler registrations, however, marginally improved by 1.8%.

“FADA believed September to be a transition month into Positivity with continued Monsoon and measure after measures being announced by the Government. The Auto Industry Retails were under pressure during the month and the de-growth was on expected lines,” said Ashish Kale, a Nagpur-based automobile retailer and the president of FADA.

This is in stark contrast to the data provided last week by an industry body of vehicle manufacturers, which suggested that retail had actually improved in September. The Society of Indian Automobile Manufacturers (SIAM) came out with a report on 11 October which suggested that vehicle registration had improved 6.5% during September over last year.

Interestingly, both FADA and SIAM sourced the vehicle registration data for their reports from the VAHAN database maintained by the Ministry of Road Transport and Highways (MoRTH).

The inventory with two-wheeler retailers continued to remain high during September, with an average inventory level between 60 and 65 days. The norm is to hold 30 days equivalent of inventory.

The inventory with passenger vehicles, meanwhile, increased to an average between 30 and 35 days from 25-30 days in August. This could be on account of automakers increasing wholesale in anticipation of the festive period starting October when sales typically increase.

Inventory with commercial vehicle dealers decreased to an average between 50 and 55 days from 55-60 days a month earlier but was still much higher than the norm of 30 days.

The cost of carrying high inventory pushed hundreds of dealers out of business, ET had reported earlier.
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