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    Diwali gives struggling auto companies reason to cheer

    Synopsis

    Retail sales of passenger vehicles improved 13.9% in October over the preceding year, while two-wheeler sales improved 8.9%, vehicle registration data from road transport and highways ministry's VAHAN dashboard showed.

    MUMBAI: Diwali sales shored up the sagging Indian automobile industry that has been struggling with receding sales for over a year now with retail sales improving for the second consecutive month in October though vehicle wholesale continued to decline for the twelfth straight month.

    Retail sales of passenger vehicles improved 13.9% in October over the preceding year, while two-wheeler sales improved 8.9%, vehicle registration data from road transport and highways ministry's VAHAN dashboard showed.

    Commercial vehicles sales, however, continued to decline with a 23.5% drop in retail in October, increasing pressure on a sector that has been struggling with unprecedented discounts and depleting margins.

    Three-wheeler retail sales improved 8.5%. Overall industry sales figure improved 7.9%. The data was collated by industry lobby Society of Indian Automobile Manufacturers (SIAM) and does not include data from three states and two union territories which are not yet on the VAHAN platform.

    Notably, sales growth is on a lower base from last year as the ongoing slowdown had already set in by October 2018. Last year's Diwali had in fact registered some of the poorest sales figures in recent history.

    On the wholesale side of the business, which represents the dispatches of vehicles from manufacturers to dealers, only the passenger vehicles segment witnessed some green shoots as sales marginally improved by 0.3%, registering growth for the first time this fiscal. Sales in other segments continued to slip with overall vehicle wholesale declining 12.8% to 2.18 million units during October.

    Commercial vehicles wholesale continued to be the worst performing segment with a decline of 23.3%. Within the commercial vehicles segment, sales of medium and heavy commercial vehicles, which include trucks and buses, halved from last October.

    The segment was slightly buoyed by light commercial vehicles like mini-trucks that declined comparatively less drastically at 8.7%.

    The differential between wholesale and retail figures represent a correction in inventory with vehicle dealers. Inventory with vehicle dealers across segments had grown in excess of 60 days at the end of last year's festive period, with 30 days being the norm, after retail did not meet manufacturers' expectations.
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