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Published on 20/02/2020 5:00:43 PM | Source: Live Mint

Retail sales of passenger vehicles decline 4.6% year-on-year in January

Posted in Industry News| #Industry #New Delhi

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New Delhi: Retail sales of passenger vehicles declined 4.6% year-on-year in January to 2,90,879 units, according to data released by Federation of Automobile Dealers Associations (FADA) on Thursday.

Although retail sales are typically subdued in January following brisk business in December, this time around it was also a result of subdued consumer sentiment and persistent slowdown in the economy.

Sales inch higher in December as manufacturers offer steep discounts to clear dealer inventories at the end of the calendar year.

Two-wheeler and commercial vehicle sales also fell during last month.

January was the second consecutive month of decline in showroom sales of passenger vehicles after two months of marginal recovery in October and November, when automakers had offered record discounts to entice customers.

Most manufacturers witnessed decline in wholesales last month as production was reduced to control inventory of BS IV emission norm-compliant vehicles and gradual increase in dispatches of BS VI compliant units at dealerships.

The new emission norms will be effective 1 April, 2020.

Sales of automobiles declined in January, except those of three-wheelers, said Ashish Harsharaj Kale, president, FADA, adding that the transition to BS-VI emission norms also delayed purchases.

“With the weak demand situation, liquidation of inventory of BS IV vehicles is the top focus for dealers and FADA has already appealed to all manufacturers to switch over completely to BS 6 vehicles. The last fourteen months has seen the one of its toughest times in auto sales. Therefore, FADA has requested OEM’s that any BS IV vehicle billed further which is not against specific customer orders, to be on returnable basis, to avoid financial loss to the dealers," said Kale.

Showroom sales of commercial vehicles declined in January, down 6.9% year-on-year to to 82,187 units, due to the slowdown in the economy and change in axle load norms of trucks. Consumption slowdown in rural markets and an increase in prices of scooters and motorcycles due to hike in insurance costs led to an 8.8% year-on-year fall in sales of two-wheelers to 1,267,366 units during the reporting month.