Passenger vehicle retail sales down 1.17 per cent in February: FADA

New Delhi: Automobile dealers' body FADA on Thursday said retail sales of passenger vehicles, measured by registration, declined 1.17 per cent to 2,26,271 units in February.

Passenger vehicle retail sales in February last year stood at 2,28,959 units, the Federation of Automobile Dealers Associations (FADA) said in a statement.

Two-wheeler retail sales stood at 12,85,398 units last month as against 12,66,163 units in February 2019, a growth of 1.52 per cent, it added.

Commercial vehicle retail sales also grew by 13 per cent to 92,805 units last month as compared with 82,129 units in the year-ago period.

FADA said three-wheeler sales were up 20.7 per cent at 65,752 units as compared with 54,474 units in February 2019.

Tractor retail sales stood at 41,485 units as compared with 36,543 units in February last year, a growth of 13.52 per cent.

Retail sales of total vehicles across categories stood at 17,11,711 units in February 2020 as compared with 16,68,268 units in the same month a year ago, it said.

Commenting on vehicle retail sales, FADA President Ashish Harsharaj Kale said February turned positive for most of the segments as the entire auto ecosystem, especially auto dealers, focused on liquidation of their BS-IV Stocks.

"Rural sales contributed for retail sales turning green with tractors also being in double-digit growth for the second month in a row," he added.

Despite the growth, the overall retail sales were much below expectations as the expected pre-buying for the BS-IV stock was not seen, he said.

"Many customers held onto their purchase decision expecting sweeter deals towards the end of March," he added.

Commenting on inventory levels, Kale said it remains a very serious concern for BS-IV two-wheelers and asked manufacturers to handhold dealers for 100 per cent liquidation of stocks before March 31 deadline.

"FADA survey reveals a very high number of two-wheeler dealers will not be able to fully liquidate their BS-IV inventory and expressed inadequate support from their OEMs (original equipment manufacturers) for 100 per cent liquidation of this stock," Kale said.

With regards to passenger vehicles and commercial vehicles, he said overall inventory is at a reasonable level, but the challenge remains in slow-moving, non-popular models as dealers look for adequate OEM support for liquidation of the same in March.

"FADA has already advocated for the return of unsold BS-IV stocks and will be pursuing this for its members if the need arises, as many dealers will be unable to sustain such losses," Kale said.

On the outlook for March, he said with banks and NBFCs getting into a cautious mode with regards to financing BS-IV stocks and many RTOs (Regional Transport Offices) across the country prescribing their own cut-off dates for permanent registration, liquidation of BS-IV inventory continues to be a challenge.

"Dealers are now facing a new challenge with coronavirus cases being detected in India and alarming drop in customer walk-ins in auto showrooms," he said.