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Automobile retail market improves in January 2019

The Federation of Automobile Dealers Associations (FADA) released the monthly vehicle registration data for the month of January, 2019 and the figures show only an improvement in sales for passenger vehicles. The two-wheeler segment showed modest growth while the three-wheeler segment put in satisfactory number. Sales of commercial vehicles were stagnant. Overall automobile industry sales in January increased 8.5 per cent over December 2018.

Commenting on the January numbers, FADA president, Ashish Harsharaj Kale said, “As predicted, healthy inquiry levels seen in December finally showed signs of conversions with the year end offers continuing in January, especially by passenger vehicle manufacturers which has helped the customer in making the final purchase.

Consumer interest which had remained buoyant has slowly but surely started converting to sales in better percentages. Overall positivity compared to the previous months backed by good retail offerings has helped passenger car sales. New launches in the month also added to the overall excitement and got the attention of the buyer.

On the other hand, although all the sectors on a monthly basis showed signs of positive growth, the two-wheeler segment continues to stutter. Growth rates in two-wheelers are not at a healthy high and have only seen positive percentage increase in the month of January  due to a huge de-growth in December.

In case of the commercial vehicle segment, the growth is flat and has substantially dropped from the high growth rate it had maintained through year to date.

Going forward, the trade body is hopeful of uptick in retail vehicle sales as interim budget announcement of new tax rebate for individuals of income up to Rs 5 lakh and assured income to farmers should bring in positive customer sentiment as potential customers sitting on the fence will have increased disposable income. This will hopefully pull up the demand for two-wheeler, light CV’s and tractors.

This coupled with government’s focus on rural roads with an allocation of Rs 19,000 crores under Pradhan Mantri Gram Sadak Yojna will definitely have a rub off effect on sales uptick for construction equipments and vehicles as well as tractor used for commercial applications.

According to FADA, the inventory of two-wheeler dealers still continues to be very high, as two-wheeler retails are still under pressure. “We hope that two-wheeler OEMs will take a realistic stock of the situation prevailing on the ground and reduce wholesale billing,” said Kale.

On this initiative of releasing registration numbers by the association, Kale said, “Beginning next month, we will release category wise comparison figures from both monthly and yearly perspective.”

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