PV retail sales fall 4.6% in June over liquidity issues, delayed monsoon

Automobile dealers' body FADA Tuesday said retail sales of passenger vehicles (PV) in June declined by 4.6 per cent to 2,24,755 units as compared to the same period last year, hit by liquidity issues and delayed monsoon.

According to Federation of Automobile Dealers Associations (FADA), PV sales stood at 2,35,539 units in June 2018.

PV wholesales, on the other hand, declined by 17.54 per cent to 2,25,732 units in June from 2,73,748 units in the year-ago period.

Two-wheeler retail sales declined by 5 per cent to 13,24,822 units last month compared with 13,94,770 units in the year-ago period.

Commercial vehicle sales dropped by 19.3 per cent to 48,752 units against 60,378 units in June last year.

Three-wheeler sales saw a dip of 2.8 per cent to 48,447 units last month from 49, 837 units in the same period last year.

Total sales across categories declined by 5.4 per cent to 16,46,776 units in June as against 17,40,524 units in the same month last year.

"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," FADA President Ashish Harsharaj Kale said in a statement.

Even with inquiry levels being reasonably strong, retail sales got affected as consumer sentiment continued to be weak and purchase postponement was seen across all segments, he added.

In the April-June quarter, passenger vehicle sales declined by 1 per cent to 7,28,785 units as compared with 7,36,290 units in the same period of the previous fiscal.

Two-wheeler sales declined by 6.4 per cent to 40,64,903 units in the April-June period as compared with 43,44,827 units in the same period of 2018-19 fiscal.

Sales across categories declined by 6 per cent to 51,16,718 units as against 54,42,317 units in April-June period of the last fiscal.

Commenting on outlook, Kale said that due to delayed monsoon in June and uneven spread in the first half of this month so far, the near-term outlook of four-six weeks remains negative.

"FADA will once again be engaging with policy makers with an appeal to look at the current situation and request for urgent measures to support the auto industry get back to its growth trajectory," he added.

Liquidity still continues to be a worry, both at the retail front as well as the for dealer working capital and with NBFCs and banks still in a cautious mode, normalcy in lending required to get industry back to growth still cannot be seen, Kale said.

He added that inventory levels in the PV segment is returning to three-week level, helping dealers manage their viability and profitability.