Auto dealers rue high inventory levels

PUNE: The February automobile sales in India fell to a new low as weak consumer demand continued to haunt automakers into the sixth straight month in the country.

The Federation of Automobile Dealers Associations (FADA) on Wednesday said the February 2019 sales were at a new low as the weak consumer sentiment continued for the sixth month in a row.

Dealer inventory levels across all categories were at an unsustainable high and at an alarming levels in two-wheelers, FADA pointed out.

"Auto dealers across the length and breadth of the country are in a high stock situation across all categories and inventory levels of passenger vehicles and commercial vehicles, which had seen partial correction in the past two months are now back to the unsustainable levels seen in November 2018," Ashish Harsharaj Kale, President at FADA said.

Starting with the huge hike in insurance costs in September, buyers have postponed purchasing vehicles, which has resulted in overall weakening of consumer sentiment, he said.

Last month, a total of 14,52,078 vehicles were sold across categories, a dip of 15.3 per cent over January 2019, and a negative growth of 8.06 per cent on year-on-year basis.

Thus, passenger vehicles retail sales fell by 28.62 per cent at 2,15,276 units over Jan and 8.25 per cent over last year, but commercial vehicles sales increased by 4.92 per cent at 61,134 units over Jan by dropped by 7.08 per cent year-on-year-basis. Three-wheelers retail sales dropped by 7.38 per cent at 50,263 units over Jan and 10.32 per cent year-on-year basis and two-wheelers decreased by 13.45 per cent at 11,25,405 units over Jan and 7.97 per cent year-on-year basis.