Passenger Vehicles Retail Sales Posts Positive Growth In January 2019: FADA

Automakers in India could probably look forward to a growth period after witnessing a slowdown in sales for the last three months. According to the findings of the Federation Of Automobile Dealers Associations (FADA), the Month on Month (MoM) retail sales of both passenger vehicles (PVs) and two-wheelers have gone up in January this year. The PV segment has witnessed a growth of 33.97 per cent in January 2019 with 271,395 units sold against 202,585 units in the previous month. In the same month, two-wheelers sales have recorded a surge of 4.25 per cent selling 11,89,679 units against 11,41,209 units which were sold in December 2018.

Also Read: New Car Launches Aid Carmakers To Sustain Growth In December 2018

According to FADA, the increase in retail sales is the result of stock clearance offers rolled-out by automakers coupled with the launch of new models. That said, FADA is accounting the growth in the two-wheeler segment to a low base in December 2018 as volumes had slumped drastically. Commenting on the January numbers, Ashish Harsharaj Kale- President, FADA said, "As predicted, healthy inquiry levels were seen in December finally showed signs of conversions with the Year End offers continuing in January, especially by Passenger Vehicle OEMs which has helped the customer in making the final purchase. Consumers' interest, which had remained buoyant has slowly but surely started converting to sales in better percentages. Overall Positivity compared to the previous months backed by good retail offerings has helped PV car sales. New Launches in the month also added to the overall excitement and got the attention of the buyer. Although all the sectors on a monthly basis have shown signs of positive growth, 2W growth rates are not at a healthy high and are seen positive due to a huge de-growth in December."

The Association is looking forward to strong sales specially of two-wheelers and entry-level cars after the budget announcement to exempt individuals with income of up to Rs. 5 lakh from paying the direct tax. Moreover, allotment of Rs. 19,000 crore for the road development in rural areas is also likely to give a push to two-wheeler sales along with tractors and light commercial vehicles (LCVs).

The PV segment in India has been under pressure in the last three months due to some economic disruptions such as rising fuel prices and onetime payment of insurance premium which have affected the sentiment of car buyers and in-turn led to the accumulation of inventory at dealerships. However, FADA says that the situation has improved now and according to its survey inventory of passenger vehicles at dealerships will last for 30 to 35 days while for two-wheelers it is 50 to  60 days.