Slowdown: Feb auto sales decline by over 19%

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SME Times News Bureau | 13 Mar, 2020
The domestic automobile sales continued to decline in February with the overall sectoral off-take plunging 19.08 per cent on a year-on-year basis, data showed on Friday.

As per the data furnished by the Society of Indian Automobile Manufacturers (SIAM), the sector's total sales declined to 1,646,332 units in February from 2,034,597 units sold during the corresponding month of the previous year.

In January, the overall sectoral off-take had declined by 13.83 per cent to 17,39,975 units from 20,19,253 units in January 2019.

Sales of all segments including passenger vehicles, commercial vehicles, three wheelers and two wheelers showed de-growth during the month under review.

Segment wise, the domestic passenger vehicle sales slipped by 7.61 per cent to 2,51,516 units in February 2020 from 2,72,243 units sold during the corresponding period last year.

"Wholesale dispatches decline by 7.6 per cent as compared to sub 2 per cent decline in retail volume during February 2020, indicating continued focus on inventory liquidation by OEMs or dealerships," said Ashish Modani, Vice President, Corporate Sector ratings, ICRA.

"BS4 inventory has come down below two week level, and there could be a sharp increase in discounts for certain slow moving models in current month to liquidate BS4 inventory ahead of nationwide BS6 rollout. Given lean inventory level at dealerships, some inventory restocking impact will be visible in wholesale dispatches during March 2020 and Q1 FY'2021."

The off-take of commercial vehicles took a major hit with sales declining 32.90 per cent to 58,670 units, compared to 87,436 units sold in February 2019.

Medium and Heavy Commercial vehicles were a major victim of the ongoing slowdown as sales fell 40.44 per cent to 20,425 units.

Similarly, sales of the three-wheeler segment, which includes both goods and passenger carriers, declined by 31.02 per cent to 41,300 units during the month under review.

In terms of two-wheelers, which include scooters, motorcycles and mopeds, the sales edged lower by 19.82 per cent to 1,294,791 units.

"The sharp decline in yoy production of both CVs and PVs at 40.1 per cent and 9.4 per cent respectively in February 2020 reflects not only the expectations of weak demand in the near term but also the challenges in the supply chain for BS-VI vehicles brought about by the outbreak of the Coronavirus," said Suman Chowdhury, President, Acuité Ratings & Research.

"If the supply chain disruption gets extended, there can be a significant impact on domestic sales of BS-VI vehicles in the first quarter of FY21."