Economic slowdown, BS-VI transition take toll on automobile sector as sales go down 19.08%

Motorcycle sales last month declined by 22.02% at 8,16,679 units as against 10,47,356 units in the year-ago period.

The total wholesale automobile sales in the country declined by a little over 19% during the last month as consumer sentiment remained subdued amid economic slowdown, the Society of Indian Automobile Manufacturers (SIAM) said on Friday.

“The automobile industry continues to face hardship due to steeper decline in production and wholesale dispatches in all segments in February 2020,” Rajesh Menon, Director General at SIAM, said.

Vehicle sales across categories stood at over 16.46 lakh units in February 2020 as against sale of over 20.34 lakh units in February 2019, according to data released by SIAM.

Domestic sales of passenger vehicles (which includes sales of cars, vans and utility vehicles) fell 7.61% during the last month to over 2.51 lakh units from more than 2.72 lakh units.

“The decline in wholesale dispatches is primarily due to economic slowdown and lower production of BS-IV vehicles. Some upside on the registration numbers of VAHAN can be attributed to last-minute purchase by customers trying to advance purchase of BS-IV vehicles,” SIAM president Rajan Wadhera said in a statement.

He further said, “Supply chain disruptions from China is also a concern, which may impact the production plans for companies going forward” while welcoming the government’s step to issue a “notification of Force Majeure for coronavirus and 24×7 clearance of shipments at all customs formations”.

According to SIAM, domestic passenger vehicle sales declined by 7.61% to 2,51,516 units in February from 2,72,243 units in the year-ago month. Car sales last month were also down 8.77% at 1,56,285 units as against 1,71,307 units in February last year.

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Total two-wheeler sales in February fell by 19.82% to over 12.94 lakh units as compared to over 16.14 lakh units in the same month last year. While motorcycle sales tumbled 22% to 8.16 lakh units, scooter sales dipped 14.27% to 4.22 lakh units.

Sales of commercial vehicles were down nearly 33% to 58,670 units as against sales of 87,436 units in the same month last year. Companies dispatched 35,245 units of light commercial vehicles during the month under review, down 28%, and 20,425 units of medium and heavy commercial vehicles, a fall of over 40%.

As per data shared by Federation of Automobile Dealers Associations (FADA), the retail sales of vehicles in the country — as measured by vehicle registration numbers, grew 2.60% to over 17.11 lakh units in February 2020. While sales of passenger vehicles declined by 1.17% to over 2.26 lakh units, that of two-wheelers and commercial vehicles were up 1.52% to 12.85 lakh units and 13% to 92,805 units, respectively.

Mr. Wadhera said some upside on the registration numbers can be attributed to last minute purchase by customers trying to advance purchase of BS-IV vehicles.

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