Driven by festive demand, retail sales of passenger vehicles increased 11 per cent in October against the same period last year to 2,48,036 units, said automobile dealers' body FADA on Tuesday. Total sales across categories increased 4 per cent to 17,09,610 units during last month, as opposed to 16,38,832 units reported in the same period last month.
According to Federation of Automobile Dealers Association (FADA), two-wheeler sales increased by 5 per cent to 13,34,941 units in October as compared with 12,70,261 units in the year-ago period. Three-wheeler sales increased by 4 per cent to 59,573 units, as per FADA. Commercial vehicle (CV) sales, however, declined by 23 per cent last month to 67,060 units as compared to 87,618 units in October last year.
"October retails were in the positive giving a much-needed respite to the auto industry and especially our dealer community after months of de-growth. The festivals saw very good footfalls at dealerships across most of the geographies and the consumer sentiment was positive and purchase decisions were concluded as used to be during the growth years," said FADA President Ashish Harsharaj Kale.
Kale further said that strong support from banks and NBFCs translated into consumers coming in to buy vehicles during the festive season. With continued liquidity easing, business appetite of banks and NBFCs have grown and will surely aid the industry in the path to recovery as the consumer sentiment strengthens in the coming days, he further addded.
As for expectations for November, 48 per cent auto retailers expect sales to remain flat this month, whereas only 19 per cent expect to see growth. 33 per cent of them expect decline in sales during November, showed a survey of FADA members.
With respect to BS-VI transition, FADA also advised retailers to work towards inventory reduction in order to avoid losses.
"FADA specially appreciates the actions taken by our two-wheeler OEM's for delivering on their commitment, of reducing stock with festival retail growth. Although not at FADA recommended levels of 21 days, two-wheeler inventory has reduced from an alarming level," Kale said.
Passenger vehicle inventory is already at reasonable levels with all major FADA members taking strong and positive steps towards stock reduction, Kale said. CV inventory has also reduced, however, further wholesale regulation is required to reach FADA's 21 days recommended levels in light of weak retail sales, he further added.