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Auto sales keep falling in November, may not recover anytime soon

Vehicle sales across categories remained in the negative zone for over a year now.

ET Bureau|
Updated: Dec 11, 2019, 08.46 AM IST
NEW DELHI: After showing a brief pick-up during the festive season, sales of passenger vehicles, trucks, motorcycles and scooters have again tapered off in November, with sluggishness in the broader economy, stringent financing norms and the industry’s impending transition to BS VI emission standards impacting demand.

Automakers dispatched 263,773 passenger vehicles to dealers last month, a decline of 0.84%, shows data available with industry body Society of Indian Automobile Manufacturers. Passenger car sales in the local market dropped by 10.83% (to 160,306 units) in the period under review, but strong demand for utility vehicles lifted overall volumes. Sales of utility vehicles rose 32.70% to 92,739 units in November.

“The wholesale reported in the passenger vehicle segment has come on a low base of last year. Some new launches in the utility vehicle segment have helped prop up sales in October and November,” SIAM director general Rajesh Menon said.

Passenger sales had risen marginally for the first time in 11 months in October, aided by the festive season and the introduction of new models in the utility vehicle space.

However, vehicle sales across categories remained in the negative zone for over a year now. Automakers feel the impending price increases due to higher input costs and switchover to enhanced emission norms will continue to disrupt the market over the next few months.

Menon said the industry body is in talks with the government to introduce BS-VI fuel across the country from February next year in order to ensure a smooth transition. Currently, the BS-VI fuel is available only in the NCR region. As of now, the government has kept April 1, 2020, as the date for introducing upgraded fuel across the country.

Sales of commercial vehicles in the month under review went down 15% to 61,907 units. “Sales of commercial vehicles will only pick up once spending in infrastructure development projects starts happening,” said Sugato Sen, deputy DG, SIAM.

Wholesale demand for two-wheelers fell 14.27% to 1,410,939 units. While sales of scooters dropped 11.83% to 459,851 units, those of motorcycles declined 14.87% to 893,538 units. Sen said two-wheeler sales remained muted due to low demand from rural areas where consumption has been affected. Overall, vehicle sales across categories in November dropped 12.05% to 1,792,415 units.

Retail sales data showed a somewhat better picture in terms of sales, indicating a correction in inventory levels in the industry. Retail sales of passenger vehicles last month went up 6.25% to 313,061 units, while those of twowheelers increased 4.60% to 1,752,903 units. Commercial vehicle retails, however, declined 8.60% to 79,547 units. Overall, retail sales across categories increased by 4.76% to 2,213,519 units, compared with 2,112,876 units in the year-ago period.

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