Passenger vehicle wholesales up 14% in Oct, retail demand muted

NEW DELHI: Contrary to retail figures, passenger vehicle wholesales rose as much as 14.19 per cent year-on-year in October to 3,10,294 units, industry body SIAM said on Wednesday. Similarly, two-wheeler wholesales too increased by 16.88 per cent to 20,53,814 units. The trend stands in contrast to the sharp decline in retail sales recorded by dealers. 

Earlier this week, dealer association body FADA had reported s 27 per cent y-o-y fall in two-wheeler retail sales in October to 10,41,682 units, while retail passenger vehicle sales fell 9 per cent to 2,49,860 units. 
Experts attribute the huge difference in retail and wholesale numbers to a long festive season combined with pre-stocking of inventory at showrooms in anticipation of festive season demand.  

Rajesh Menon, Director General, SIAM said, “The month of October saw continuity in sales growth trajectory, drawing on from the previous month. There were marked improvements witnessed across certain segments due to very good festive demand... October wholesale numbers have been good on account of dealers preparing to serve demand for the upcoming Diwali festival, which is in November”.

Care Ratings said in a note that the performance of domestic wholesales over the first seven months of FY21 shows that all segments are lagging compared to the previous year. Two-wheeler domestic wholesales are short by 29.8 per cent, while passenger vehicles are down by 25.9 per cent. Three wheelers domestic wholesales have slid by 85.2 per cent during the period.

“This shows that recovery in automobiles industry is implausible in FY21, unless the next 5 months show a massive growth, which is unlikely given the uncertain macro environment, ongoing salary cuts and high unemployment rates,” said the report.