Q1 ends on negative note as vehicle registrations fall by 6 pc

Tight liquidity conditions in the market and delayed monsoons dented the consumer sentiment, leading to de-growth of 6 per cent in vehicle registrations during April to June, the Federation of Automobile Dealers Associations (FADA) said on Tuesday.

Total vehicle registrations dropped to 5,116,718 in first quarter of current fiscal year from 5,442,317 in Q1 of FY19.

The commercial vehicles segment led the slowdown with a drop of 14 per cent followed by two-wheelers at 6.4 per cent and three-wheelers at 6.1 per cent. Registration of passenger vehicles suffered by one per cent.

During June, the sales were negative both year-on-year and month-on-month. Total vehicle registrations fell by 5.4 per cent with commercial vehicles dropping by 19.3 per cent, two-wheelers by 5 per cent, passenger vehicles by 4.6 per cent and three-wheelers by 2.8 per cent.

"Despite starting the month with a positive outlook and hope, the monthly sales ended in a de-growth due to continued liquidity tightness and a much-delayed monsoon," said FADA President Ashish Harsharaj Kale.

"Although inquiry levels were reasonably strong, retail sales got affected as consumer sentiment continued to be weak and purchase postponement was seen across all segments," he said in a statement.

Passenger vehicle inventory levels continued to decrease giving the much-needed respite but two-wheeler and commercial vehicle inventory increased further and continue to remain a serious cause of worry for auto dealers.

Overall, the states with highest vehicle registrations in June were Uttar Pradesh (293,905), Maharashtra (156,716) and Tamil Nadu (149,698). In passenger vehicle category, the states with highest registrations were Uttar Pradesh (30,358), Maharashtra (24,806) and Karnataka (18,288).

In two-wheeler category, the states with highest registrations were Uttar Pradesh (255,812), Tamil Nadu (124,534) and Maharashtra (118,453). In three-wheeler category, the states with highest registrations were Uttar Pradesh (7,735), Maharashtra (7,285) and Gujarat (4,960).

In commercial vehicle category, the states with highest registrations were Tamil Nadu (6,500), Maharashtra (6,172) and Karnataka (4,633).

"Liquidity still continues to be a worry, both at the retail front as well as the for dealer working capital," said Kale. "With non-banking finance companies and banks still in a cautious mode, the normalcy in lending which is required to get us back to growth still cannot be seen."

FADA India represents over 15,000 automobile dealers having 25,000 dealerships including 30 associations of automobile dealers at the regional, state and city levels accounting for 90 per cent of market share.

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