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Passenger vehicle retail sales jump 11% in October on festive demand: FADA

According to Federation of Automobile Dealers Associations (FADA), passenger vehicles (PV) sales stood at 2,23,498 units in October 2018. Two-wheeler sales increased 5 per cent to 13,34,941 units last month as compared with 12,70,261 units in the ...

, ET Bureau|
Updated: Nov 19, 2019, 04.52 PM IST
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Total sales across categories rose 4 per cent to 17,09,610 units in October, as against 16,38,832 units in the same month last year.
MUMBAI: The retail sales of automobiles showed an uptick during the month of October as both Dussehra and Diwali, which register some of the highest sales during a year, fell during the same month.

Vehicle registration numbers at regional transport offices (RTOs), which are a proxy for sales, improved 4% over October last year, as per a report by the Federation of Automobile Dealers Associations (FADA), a retailers' lobby body. The Indian automobile industry has been in a tailspin for over a year now, with sales consistently falling amidst poor consumer sentiment in the country.

“The festivals days saw very good footfalls at dealerships across most of the geographies and the consumer sentiment was positive and purchase decisions were concluded as used to be during the growth years,” said FADA President Ashish Kale.

Registration numbers of passenger vehicles (PV) improved 11% during October, while those of two-wheelers improved 5%. Commercial vehicles (CV) retail continued to decline with a de-growth of 23% in registration during October.

Inventory build-up at vehicle dealers’ end eased across the board, as manufacturers continued to curtail production. At the end of October, inventory with PV dealers averaged between 25 and 30 days’ equivalent, while that for two-wheeler and CV dealers was at 35-40 days and 40-45 days, respectively. The norm is to hold 30 days’ worth of inventory.

However, October was an exceptional month and sales may taper again during the remaining two months of 2019, experts said. December is usually a month of low sales as many customers delay purchase to January to get newer model-year vehicles.

“FADA remains cautious for the near and mid-term post the festive seasons as BS-VI (emission norms) transition approaches and rural demand yet to pick up due to extended and excessive monsoon,” the dealers’ body said in a release.

The latest report from FADA showed a trend similar to that of a report released last week by the Society of Indian Automobile Manufacturers (SIAM), a manufacturers' lobby group. The registration numbers in both the reports diverged by about 4 percentage points with the SIAM report suggesting an overall growth of 7.9% against FADA’s 4%.

Notably, both the agencies source data from the road transport and highways ministry’s VAHAN platform. VAHAN data is prone to change and is crude, needing further filtering to reflect actual sales, ET had reported last month.

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