Retail counter: Auto sales clock 11% growth in Dec, a first this fiscal

Commercial vehicles and three-wheelers are the only categories where sales continue to be subdued with decline of 14% and 53%, respectively.

Car registrations vehicle sales

While wholesale despatches have shown growth for the past few months, retail automobile sales registered growth in December – first time so far this fiscal. According to data released by the Federation of Automobile Dealers Associations on Monday, retail sales across categories grew 11% during December on a year-on-year basis. The growth was on the back of a good crop season, better offers in the two-wheeler segment, new launches both in passenger vehicle as well as two-wheeler segments and a fear of price increase in January.

While retail sales of PV had shown growth in previous months also, December for the first time saw sales of two-wheelers move into the positive territory, growing by 12% y-o-y.

The sales growth is not surprising as being the calendar year ending month dealers clear their stocks as consumers prefer new year manufactured vehicles. To push sales during the month both manufacturers and dealers offer discounts which are greater than earlier months. Though this time discounts were lower than last year during the same month, nevertheless, they were better than previous months during the year.

However, FADA, which reports sales on the basis of vehicle registrations on the government’s portal Vahan, has given a bleak near-term outlook. “While December saw good spill over demand continuing from festive season and pre-buying due to price hike announcement, demand for vehicles in January looks to be bleak. PV may witness growth if demand supply mismatch is resolved. With recent hikes announced by all OEMs, Fada expects a temporary blip in demand as customers will take time to absorb the same,” the association said in its statement.

Commercial vehicles and three-wheelers are the only categories where sales continue to be subdued with decline of 14% and 53%, respectively.

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Katherine E. Ackerman

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