Retail car sales down 3 percent in December 2018

The Federation of Automobile Dealers Associations (FADA) today released the vehicle registration data for December 2018 and April-December 2018, which showed a decline in sales of passenger vehicles.

Retail sales of PV in December 2018 declined 3 percent year-on-year to 2,02,585 units, and when compared to November 2018, volumes were down 7 percent. In the April-December 2018 period, PV sales dropped 2 percent to 19,17,750 units as against 19,65,630 units in April-December 2017.

However, FADA observed that sales have shown signs of a revival, especially in the last 15 days, due to softening of fuel prices, and this bodes well for the near term.

“We are seeing initial signs of revival in the industry as compared to the recent festival season. Passenger vehicle sales arrest further de-growth as good retail momentum in last 15 days indicates sentiment turning positive,” FADA president, Ashish Harsharaj Kale said in a statement.

Country's apex body Society of Indian Automobile Manufacturers (SIAM) releases only the wholesale sales data every month, which is essentially the number of vehicles dispatched by manufactures to dealers, and does not necessarily reflect actual consumer demand. Higher dispatches without the corresponding increase in consumer demand results in a build-up of stock levels at the dealer.

"Moderation in wholesale billing in the month of December and some reasonably good retail sales towards the month end has definitely helped in reducing the extremely high PV inventory to reasonable levels in many markets. Continued efforts in the right direction by all OEMs in the PV segment will surely bring down the inventory levels to normal across all geographies by January end," FADA observed in a statement.

The decision by FADA to release vehicle registration data on a monthly basis is aimed at "acting as a barometer for the industry as well as for the policymakers to help understand the on-the-ground situation of auto sales, in turn helping frame future actions and policies."

Improvement in overall sales

Retail sales in December 2018 saw the overall sales (two-wheelers, three-wheelers, commercial vehicles and passenger vehicles) at 1,442,514 units, down by 16 percent compared to the 1,707,820 vehicles sold in November 2018. However, compared to the same period in 2017, retail sales grew by 9 percent.

Sales of two-wheelers in India in December 2018 were, at 1,141,209 units, down sharply by 18 percent (November 2018: 1,383,572) month on month. However, when compared to December 2017, sales rose by 11 percent.

Also see:

Luxury car market feels the sting of a challenging 2018