Passenger vehicle retail sales up 9.81% in September to 195,665 units

Passenger vehicle retail sales are back in green with 9.81 per cent growth in the month of September 2020. Total PV sales increased to 1,95,665 units from 1,78,189 units, in September 2019. Other than PVs, tractors remain the only segment to show growth in sales while all the other segments continue to be in red. Overall retail sales report a 10.24 per cent drop to 13,44,866 units in September 2020 as compared to 14,98,283 units, a year ago.

With no more lockdowns as announced by the Central Government, dealers anticipate a high growth period during the festival months of October and November for automobile sales in India.

Two-wheeler sales dropped by 12.62 per cent to 10,16,977 units from 11,63,918 units, while three-wheeler segment reported 58.86 per cent drop to 24,060 units as compared to 58,485 units and commercial vehicle sales dropped by 33.65 per cent to 39,600 units from 59,683 units. Tractor sales rose by 80.39 per cent to 68,564 units from 38,008 units, a year ago, according to Federation of Automobile Dealers Associations (FADA) numbers.

FADA President, Vinkesh Gulati said that with the government’s persistent effort to unlock India, the month of September continued to witness automobile registrations on a rise as compared to previous months.

“Passenger Vehicles for the first time saw positive growth coming back on YoY basis. With social distancing on customer’s mind coupled with government’s push to further normalise business conditions and banks becoming more considerate to finance vehicles, entry level passenger vehicles saw good demand thus indicating a preference for personal transportation over public. New launches & vehicle availability played their part as catalyst. A lower base during last financial year also helped the cause,” said Gulati.

Tractor sales continued their dream run as Kharif sowing witnessed record progress of area covered till date when compared to last year. With a good Rabi season resulting in good disposable income, the rural market also saw its rub off effect on two-wheeler, small passenger vehicles and small commercial vehicles. Overall, two wheeler, three wheeler, and commercial vehicles continued to march ahead on MoM basis and inched up to narrow their gap with last year’s sale even though pre-covid levels are yet to be seen across all categories, said FADA.

He added, the economic revival was mostly limited to Rural India and impact of Covid-19 was still felt on larger states and urban centres, the top states which makes up half of India’s economic output (Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat and West Bengal) are now showing signs of revival as economic activities in these states are at their peak since lockdown began in March. This has also helped in creating a demand for automobile sales.

On the outlook, he said, October and November bring with the much awaited festival season of Navratri, Durga Puja & Diwali. With no more lockdown as announced by the Central government, FADA anticipates a high growth period during these two months for automobile sales in India.

Gulati added, the government’s consideration to waive-off interest during moratorium up to Rs 2 crore will help in improving customer sentiment thus making them conclude vehicle purchase decisions during the festivities. With Banks and NBFCs also gearing up with various festival offers to woo retail customers, auto sales are expected to witness a renewed growth and may close at par with last year. Passenger vehicles and two-wheelers are expected to lead the way, said Gulati.

With festival season round the corner and elections approaching in Bihar, the risk of Covid spread resurging may play a spoilsport in specific regions, he cautioned.

According to FADA, inventory for two-wheelers stands at 45-50 days and PV stands at 35-40 days. Any dampener in vehicle sales during the upcoming festivals will have a catastrophic impact on Dealers financial health.

FADA has asked both OEMs and the Dealers to avoid building any further inventory as this may lead to a disastrous situation similar to the last two festive seasons when sales were below the mark.