Despite a significant increase in discounts offered by the vehicle manufacturers, retail sales of passenger vehicles in December declined by 9% year on year to 215716 units, as a result of subdued customer sentiment and current economic slowdown, according to data released by Federation of Automobile Dealers Associations (FADA). Traditionally, manufacturers witness high retail sales in December due to the increased discounts to clear stocks at dealerships, at the end of the calendar year. This decline in retail sales comes on the back of a low base in the corresponding period.
Showrooms sales for two-wheelers and commercial vehicles also reported a double-digit decline in sales indicating that the current economic slowdown is far from over. The decline in December comes after two months of marginal recovery in October and November, as automakers offered record discounts to entice customers during the festival period.
Most the manufacturers witnessed a decline in wholesales during the month as production was reduced to control the inventory of BS 4 emission norm compliant vehicles, at dealerships before the transition to the BS 6 norms on April 1, 2020. According to data released by Society of Indian Automobiles Manufacturers (SIAM), wholesales of passenger vehicles declined by just 1.24% to 235786 units.
According to Asish Harsharaj Kale, president, Federation of Automobile Dealers Associations (FADA), this sharp decline in sales has denied the dealer community an opportunity to reduce the BS-4 vehicle inventory before making the transition to BS-6 and FADA would recommend its members to take a very cautious approach towards liquidation of the BS 4 vehicle stock.
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