Passenger vehicle retail sales dip 9 pc in December: FADA

Automobile dealers' body FADA on Tuesday said retail sales of passenger vehicles in December 2019 declined 9 per cent to 2,15,716 units year-on-year, as even the best offers failed to lift weak consumer sentiments.

According to the Federation of Automobile Dealers Associations (FADA), passenger vehicles (PV) sales stood at 2,36,586 units in December 2018.

Two-wheeler sales declined 16 per cent to 12,64,169 units last month as compared with 15,00,545 units in December 2018.

Commercial vehicle sales declined 21 per cent to 67,793 units as compared to 85,833 units in December 2018.

Three-wheeler sales, however, rose one per cent to 58,324 units last month.

Total sales across categories declined 15 per cent to 16,06,002 units in December 2019 as against 18,80,995 units in the year-ago month.

FADA President Ashish Harsharaj Kale said December sales de-growth was not on expected lines as the inquiry levels all through the month were quite robust.

Consumer sentiment continues to be very weak as customers did not conclude on the purchase even after taking the efforts of inquiring and despite the best offers being available, he added.

"The sharp decline in growth has denied the dealer community an opportunity to reduce its BS-IV inventory making the transition to BS-VI trickier," Kale said.

With such weak consumer sentiment, FADA recommends a very cautious approach to its members with serious focus on BS-IV inventory liquidation, he added.

"FADA will work towards seeking relief from the Honourable Supreme Court for the BS-IV inventory of its members as with such weak consumer demand the near term retail sales are unpredictable, making it extremely difficult for our members to continue the current business and also ensure a nil BS-IV inventory on March 31," Kale noted.

The commercial vehicle and two-wheeler inventory still remains a concern, he added.

Besides, liquidity still remains a concern for the dealers' community as well as for the retail customer as banking industry continues to be in cautious mode, Kale said highlighting the challenges.

"Equal importance needs to be given to availability of reasonably liberal credit, especially in a developing country like ours where the growth is driven by first time buyers or individuals and businesses looking to expand beyond their current capacity," he added.