Friday, Mar 29 2024 | Time 17:37 Hrs(IST)
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Business Economy


New Delhi, Mar 13 (UNI) In February, retail sales of passenger vehicles (PV) were slashed by 8.25 per cent to 2,15,276 units as compared to the same period last year, hit by lower offtake by end customers, stated Federation of Automobile Dealers Associations (FADA).
The report released on Wednesday stated that PV sales stood at 2,34,632 units in February 2018. Two-wheeler sales declined by 7.97 per cent to 11,25,405 units last month as compared with 12,22,883 units in year-ago period.
"After a month of spike in Passenger Vehicle sales in January, the auto industry is once again witnessing downward trend as February turned out to be one of the slowest month for auto retails during this financial year," said FADA president Ashish Harsharaj Kale in a statement.
Mr Kale, on the monthly vehicle registration data for the month of Februry’19 said,"Indian auto sales are experiencing a prolonged slowdown as its already seen 6 months of slowing sales and growth reversal and positive triggers in the near term appear few. After a month of spike in PV sales in January which was largely due to year end stock clearance getting extended and few new launches which generated some excitement, the Industry is once again witnessing downward trend."
"Starting with the huge hike in insurance costs in September, we have seen a lot of negative factors come together in the past few months, leading to major postponement in purchase decisions and overall weakening of consumer sentiment," he added.
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 2 months are now back to the unsustainable levels seen in November 2018.
"FADA has been highlighting the high level of Inventory amongst the 2W Dealers and would like to Express Serious Concern that it has now reached Alarming Proportions and in some geographies has breached the unheard level of 100 days of stock as per todays' retail situation.”
Commenting further the FADA president said, “FADA believes, as does the entire Auto Industry that the dip in demand is temporary and India will continue to be amongst the fastest growing auto markets in the world. Having said that, navigating smoothly out of the current slowdown is the need and the entire Auto ecosystem, including dealers, will have to and already are in a cost regulation mode, till the Industry returns to Vibrancy.”
"Already facing a substantial increase in operational costs in recent times due to various factors as well as increased working capital needs and that too in a tight liquidity environment, prolonged maintenance of such high inventory and its additional costs is unsustainable and with demand continuing to be a challenge, dealers would be urgently looking to reduce their inventory in the months of March and April," he cautioned.
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