FADA Says Vehicle Inventory With Dealers Continues To Remain High

The Financial Year has began on a negative note for local auto industry as all categories of vehicle registered de-growth, noted the Federation of Automobile Dealers Associations (FADA) yesterday as it released the Monthly Vehicle Registration Data for April'19. Despite temporary uptick in March retails and April retail figures being above the lowest month of Feb in this CY, overall consumer sentiments continue to remain weak. Dealer inventory continues to remain high and unlike March, no substantial reduction is seen across any segment. FADA strongly advocates for 21-days of Inventory for sustained dealer viability. Dealer liquidity and access to working capital remains negative and is a matter of grave concern.

Commenting on April'19 performance, FADA President, Ashish Harsharaj Kale noted that the month of April ended on a negative note. Amongst the Categories on a YoY basis, Commercial Vehicles and Three Wheelers, which registered highest growth during FY'19 witnessed highest fall in the month of April, while 2W and PV De-grew -9% and -2% respectively. On a Year on Year basis, there was de-growth in all the categories as April'18 had a very high base. The only positive and that too on a MoM basis was shown by Commercial Vehicles category which grew by 2%. The Near Term Outlook Continues to be Negative to Neutral with the absence of any immediate positive triggers which could affect Retail Sales, he stated further.

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