Weak demand takes toll on car retail sales

New Delhi: Retail sales of passenger vehicles (PV) declined by 11 per cent to 2,43,183 units in July as compared to the same period last year, hit by weak demand across the country, automobile dealers' body FADA said on Monday.

According to Federation of Automobile Dealers Associations (FADA), PV sales stood at 2,74,772 units in July 2018.

Two-wheeler sales declined by 5 per cent to 13,32,384 units last month as compared to 14,03,382 units in the year-ago period. Commercial vehicle sales dropped by 14 per cent to 23,118 units against 26,815 units in July last year.

Three-wheeler sales, however, saw an increase of 3 per cent to 55,850 units last month from 54,250 units in the same period a year ago. Total sales across categories declined by 6 per cent to 16,54,535 units in July as against 17,59,219 units.

"Consumer sentiment and overall demand continued to be quite weak across all segments and most geographies," FADA President Ashish Kale said.

With PV manufacturers reducing wholesale billings as well as regulating production, inventory levels is now very close to 21 days level. Average inventory for PVs currently ranges from 25-30 days, he added.

"CV inventory continues to remain at high levels...FADA urges OEM's to help regulate this inventory at the earliest by regulating wholesale supplies," Kale said.

Average inventory for CV ranges from 55-60 days. He also pointed out to high level of inventory in the two-wheeler segment which currently ranges between 60-65 days.

"We would once again urge and request all our two-wheeler OEM's to help regulate this inventory to regular levels of three weeks and help our members avoid the perils associated with high inventory," Kale said.

FADA represents over 15,000 automobile dealers who run around 25,000 dealerships across the country.