Retail passenger vehicle sales declined 3% y-o-y in December as high insurance premium and tight liquidity conditions continued to impact the demand for the fifth consecutive month.
Retail passenger vehicle sales declined 3% y-o-y in December as high insurance premium and tight liquidity conditions continued to impact the demand for the fifth consecutive month. On a month-on-month basis too, volumes declined 7% to a little over 2 lakh units, data released by the Federation of Automobile Dealers Association (Fada), based on vehicle registrations, showed.
Some analysts had, however, expected that retail sales were not as bad as the wholesale numbers, mainly for Maruti Suzuki India. “Our channel checks suggest that retail sales have been better than expected,” analysts at Nomura had said. According to the data, which were collated in collaboration with the ministry of road transport & highways, vehicle registration during the April-December 2018 period fell 2%. Even as volume demand continue to remain under pressure, Fada said there was a surge in the last 15 days in PV sales, indicating demand uptick.
“Passenger vehicle sales arrest further de-growth as good retail momentum in last 15 days indicates sentiment turning positive,” said Fada president Ashish Harsharaj Kale. Two-wheeler volumes grew 11% y-o-y during December but on a month-on-month basis, it fell 18%, Fada said, adding inventory of two-wheeler dealers still continue to be very high ranging from 55-60 days.
Sales of motorcycles and scooters suffered a setback after the Supreme Court ordered compulsory five year third-party insurance from September, shooting up the premiums. As per Fada’s earlier findings, registrations of four-wheelers fell 14% in the 42-day period during Dussehra and Diwali, while that of two-wheelers slumped 13%. Wholesales volumes of top 5 carmakers grew only by over two last months, with Maruti Suzuki and Tata Motors reporting just 1% rise in sales. Mahindra&Mahindra posted a 3% decline while other carmakers including Hyundai and Honda Cars reported low single-digit growth.
Two-wheeler volumes also remained lacklustre with Hero MotoCorp and Royal Enfield posting 4% and 13% y-o-y decline, respectively. TVS Motor Company registered a marginal 1% growth in domestic sales. Bajaj Auto was an exception that reported a 39% y-o-y rise in wholesale volumes, albeit on a low base.