Sale of passenger vehicles in region dips 60%

Vijay C Roy
Tribune News Service
Chandigarh, October 18

Positive measures announced by the Union government for the auto sector have failed to revive the sentiments as retail sales of passenger vehicles declined sharply by 20% in September (year-on-year) to 1,57,972 units across the country, according to data released by the Federation of Automobile Dealers Associations (FADA).

According to the data, sale of passenger vehicles fell by as much as 60% in Jammu & Kashmir, followed by Chandigarh (52%) and Haryana (17%). Punjab and Himachal Pradesh witnessed a decline of 12% each.

“The sales in September were on expected lines as manufacturers corrected the inventories at the dealer-end by restricting the supply. Moreover, sale of vehicles also remained in the red due to ‘shradh’ period in the month, considered inauspicious for big purchases in the northern states,” said Mohit Pratap Singh, managing director, PMG Autos.

The northern region, comprising Punjab, Chandigarh, Haryana, Himachal Pradesh, J&K, including Delhi, Uttar Pradesh, Rajasthan, contributes 25-30% to the total sales across the country.

According to insiders, the sales in Jammu & Kashmir were affected due to low dispatches to the dealers and due to lower sentiments. Surprisingly, the sales in Chandigarh went down drastically from 1,220 units a year ago to 582 units in September. Dealers attributed it to slowdown and ‘shradhs’ as the main reasons behind the decline in sales.

Automobile dealers said high inventory levels, which started during the festive season last year, still continue to be a problematic area though it has improved to some extent.

Across the country, commercial vehicles showed slight reduction in inventory levels but passenger vehicle segment witnessed an increase in inventory levels, as companies pushed in higher number of units anticipating higher sales during the festive season.

According to the FADA, two-wheeler sales declined by 12.1% across the country to 10,98,271 units last month as compared to 12,48,998 units in the year-ago period.  The sale of commercial vehicles dropped by 18.5% to 63,518 units as compared to 77,980 units in September last year.  Three-wheeler sales saw an increase of 1.8% to 55,553 units last month from 54,560 units in the same period previous year. Total sales across categories declined by 12.9% to 13,75,314 units in September as against 15,79,191 units in the same month last year.

On declining sales, FADA president Ashish Harsharaj Kale said de-growth was on the expected lines. “Continued heavy monsoons in major geographies and the ‘shradh’ period also contributed to his sales lag.”