At a time when the aggregate number of vehicles at the dealer level has been showing a decline on a month-on-month basis, the industry has reasons to cheer given the reported uptrend in registrations. According to a report from the Federation of Automobile Dealers Associations (FADA) released on Thursday, registrations have gone up over the last two months.
But, the inventory levels of various categories of vehicles are still high at the dealers’ level, FADA said. For instance, the inventory level of passenger vehicles (PVs) and commercial vehicles (CVs) is 30-35 days. For two-wheelers, it is as high as 50-60 days.
According to the association, PV retail sales in January have increased 34 per cent to 2,71,395 units, as manufacturers continued to dole out year-end offers last month as well. In December, PV sales stood at 2,02,585 units. FADA collected vehicle registration data from 1,081 out of the 1,437 regional transport offices across the country. “As predicted, healthy inquiry levels seen in December finally showed signs of conversions with the ‘year-end’ offers continuing in January, especially from PV manufacturers. This has helped the customers in making the final purchase,” Ashish Harsharaj Kale, President, FADA, said.
Consumer interest, which had remained buoyant, is slowly translating into sales in better percentages. Overall positivity compared to the previous months, backed by good retail offerings has helped PV sales, and new launches this month added to overall excitement, he said.
Budget boost
Going forward, FADA is hopeful of an uptick in retail vehicle sales, as the tax rebate for individuals with income up to ₹5 lakh and assured income to farmers announced in the Interim Budget should boost customer sentiment as potential buyers sitting on the fence will have increased disposable income, he added.
This, coupled with the government’s focus on rural roads with an allocation of ₹19,000 crore under the Pradhan Mantri Gram Sadak Yojna, will definitely have a rub-off effect on sales of construction equipment and vehicles as well as tractors used for commercial applications, Kale added.
This will hopefully boost the demand for two-wheelers, light commercial vehicles and tractors too, the Association said.
“All the sectors, on a monthly basis, have shown signs of positive growth; two-wheeler growth rates are not at a healthy high and are seen to be positive due to a huge de-growth in December. Commercial vehicle growth is flat and has substantially dropped from the high growth rate it had maintained through year to date,” it said. FADA also highlighted that the inventory of two-wheeler dealers still continues to be very high, as retailers are still under pressure. It hoped that the two-wheeler manufacturers will take a realistic view of the situation.