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Auto sector sales slow down in Sept too, reports FADA

Our Bureau New Delhi | Updated on October 18, 2019 Published on October 18, 2019

September auto registration fell to a newer low and continues to reflect weakness in customer sentiment even with onset of festival season and never seen before discounts, a latest report by an industry body said.

Continuance of heavy monsoons and complete shraddh period within the month also contributes to subdued retails, Federation of Automobile Dealers Associations (FADA) said on Friday.

On an yearly basis, retail sales of passenger vehicles fell by 20 per cent in September to 1,57,972 units as compared with 1,97,653 units in the corresponding month last year.

In the two-wheeler segment, the retail sales declined by 12 per cent year-on-year (YoY) to 10,98,271 units during last month, as against 12,48,998 units in September 2018.

“FADA believed September to be a transition month into positivity with continued monsoon and measure after measures being announced by the government. The auto industry retails were under pressure during the month and the de-growth was on expected lines. The complete effects of the positive measures announced by the government was still not visible at the retail levels in the month of September," Ashish Harsharaj Kale, President, FADA, said.

High inventory concerns which started with previous festive season still continuous to be a problematic area for the auto dealer fraternity.

"With retails expected to be high in October, it will provide an opportunity to pur members to correct the same, before we transition to BS-VI," he said.

The corporate tax cut although not a direct positive for auto retails, but hopefully the savings by corporates will result in higher outflow in promotional offers and marketing spends resulting in some positivity in the market, he added.

According to FADA, the average inventory for passenger vehicles ranges from 30-35 days (25-30 days in August), while of two-wheelers had an inventory ranging from 60–65 days (same as in August)

Published on October 18, 2019
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