Inventory of BS-IV vehicles a worry as people expect huge discounts: FADA

Our Bureau New Delhi | Updated on March 12, 2020

Ashish Harsharaj Kale, President, FADA

Registration of two- and three-wheelers grew in February

With banks and non-banking finance companies getting into a cautious mode with regards to financing BS-IV stocks and many regional transport offices (RTO) across the country prescribing their own cut off dates for permanent registration, retails of dealer inventory of BS-IV stocks continue to be a challenge, said an industry body on Thursday.

Dealers are also now facing a new challenge with coronavirus cases being detected in India and alarming drop in customer walk-ins in auto showrooms, the Federation of Automobile Dealers’ Associations (FADA) said.

It said the average inventory for passenger vehicles (PVs) ranges from 10–12 days, for two-wheelers it is from 20–25 days and for commercial vehicles 10–15 days.

Covid-19 impact

The overall uncertainty of the situation due to Covid-19 and the drops in the share markets, further contribute to the already weakened sentiment as purchase decisions are getting postponed, it said.

The association also said that BS-VI vehicles supply is also affected due to the Covid-19 situation in China and because of that it has become more challenging towards the transition and due to all this, the outlook for March is negative.

“FADA would once again urge the government to look towards a relief package for the auto industry with temporary reduction in GST till return of stability and a financially attractive Scrappage Policy, which will not just reduce pollution on roads of older vehicles, but will also help in reviving commercial vehicle sales which currently are the worst hit,” Ashish Harsharaj Kale, President, FADA, said.

Meanwhile, FADA said the vehicle registration in February improved year-on-year (YoY) as compared to previous months. For instance, registration of two-wheelers grew by around 2 per cent YoY to 12,85,398 units in February as compared with 12,66,163 units in February 2019.

Registration of CVs rises

Registration of three-wheelers has grown by 21 per cent YoY to 65,752 units last month from 54,474 units in corresponding month last year. Similarly, the registration of CVs has gone up to 92,805 units, up 13 per cent YoY as compared with 82,129 units in February last year.

However, registration of PVs declined by a percentage point to 2,26,271 units during the month as compared with 2,28,959 units in February last year.

However, “Despite YoY growth, the overall retail sales were much below expectations as the expected pre-buying for the BS-IV stocks was not seen. Many customers held onto their purchase decision expecting sweeter deals towards end of March,” Kale added.

Published on March 12, 2020

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