9.81% growth in passenger vehicle retail sales in Sept with 1,95,665 units sold | highest since Mar
India's passenger vehicle retail sales witnessed a substantial growth of 9.81% in September 2020 with 1,95,665 units sold. While the sale of all other segments of vehicles remained negative, the sales of passenger vehicles and tractors showed growth. However, Overall retail sales report a 10.24 percent drop to 13,44,866 units in September 2020 as compared to 14,98,283 units, a year ago.
With no announcement of lockdown by the Government of India, industry body, retailers and manufacturers are all gearing up for the festive season in October and November to boost their sales. According to the numbers released by the Federation of Automobile Dealers Association (FADA), Two-wheeler sales dropped by 12.62 percent to 10,16,977 units from 11,63,918 units, while the three-wheeler segment reported a 58.86 percent drop to 24,060 units as compared to 58,485 units and commercial vehicle sales dropped by 33.65 percent to 39,600 units from 59,683 units. Tractor sales rose by 80.39 percent to 68,564 units from 38,008 units, a year ago. "Passenger vehicles for the first time saw positive growth coming back on a YoY basis. With social distancing on customer’s minds coupled with the government’s push to further normalize business conditions and banks becoming more considerate to finance vehicles, entry-level passenger vehicles saw good demand thus indicating a preference for personal transportation over the public. New launches & vehicle availability played their part as a catalyst. A lower base during last financial year also helped the cause," said FADA President Vinkesh Gulati referring to the Government's persistent efforts to unlock the industries pan India. According to Gulati, the government's effort to open up the economy in the pandemic has resulted in growth in automobile registrations in September 2020 compared to previous months. He added, "the economic revival was mostly limited to Rural India and impact of Covid-19 was still felt on larger states and urban centers, the top states which makes up half of India’s economic output (Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat and West Bengal) are now showing signs of revival as economic activities in these states are at their peak since lockdown began in March. This has also helped in creating a demand for automobile sales." Tractor sales in India continued to grow in India thanks to the Kharif sowing witnessing record progress of area covered till date when compred to the previous year. Gulati also added that the Central Government's decision to waive-off interest during the moratorium period upto ₹2 crore will aid in improving the customer sentiment and will help in making a vehicle purchase in coming festive season. The NBFC sector and Banks are also gearing up with offers to attract retail customers, this will surely result in more growth in passenger vehicle retail sales.
“As a caveat, with festival season round the corner and elections approaching in Bihar, the risk of Covid spread resurging may play a spoilsport in specific regions. Inventory for 2W stands at 45-50 days and PV stands at 35-40 days. Any dampener in vehicle sales during the upcoming festivals will have a catastrophic impact on dealers financial health,” FADA also warned.