New Vehicle Retail Sales Drops By 7.17 Per Cent In January 2020

The slowdown in the Auto Industry is still taking a toll on the sales of new vehicles as consumer sentiments remain negative. According to the vehicle registration numbers published by Federation Of Automobile Dealers' Association (FADA), retail sales have declined by 7.17 per cent in January 2020 selling 17,50,116 units as compared to 18,85,253 units sold a year ago. Sales of passenger vehicles went down by 4.61 per cent at 2,90,879 units against 3,04,929 units sold in the same month last year. Two-wheelers sales took the worst hit dropping by 8.82 per cent selling 12,67,366 units as compared to 13,89,951 units sold in January last year while sales of three wheelers went up by 9.17 per cent selling 63,514 units last month against 58,178 units sold in January last year. Commercial vehicles (CV) sales too witnessed a de-growth of 6.89 per cent at 82,171 units as compared to 88,271 units sold a year ago. Sales of TRACs went up by 5.11 per cent at 46,170 units sold as compared to 43,924 units sold in January 2019.

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Commenting on the sales, Ashish Harsharaj Kale, President- FADA said, "Auto sales continue to be in the negative territory in the month of January, except for 3W, with many consumers still not concluding on their decisions. Ongoing Transition of BS-IV to BS-VI is also a factor in delayed purchase decision. Overall Weak Economic sentiment continues and even the Budget 2020, although an inclusive budget with growth drivers for the mid to long term, did not have any direct measures nor any immediate growth Spurring initiatives for the Auto Sector."

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The report further mentions that almost 80 per cent dealers have negative or neutral sentiments and almost 72 per cent dealers are expecting negative or flat growth even in February. Moreover, 75 per cent dealers have also rated liquidity to be bad or neutral, hence FADA has requested NBFCs and banks to ensure financing of BS4 inventory. Earlier, FADA had also requested automakers to start dispatching BS6 inventories only the dealerships.

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