January FADA data sees jump in month-on-month sales but market sentiment still weak

The monthly vehicle registration data for January 2020 released by the Federation of Automobile Dealers Associations (FADA) saw a six percent growth compared to December 2019 but on an year-on-year basis, sales dropped 7.17 percent to 1,750,116 vehicles so far in January (January 2019 registrations: 1,885,253). The total registration number includes two-wheelers, three-wheelers, CVs, PVs and tractors.

According to the FADA data, the passenger vehicle segment saw the sharpest jump in registrations, up 34.84% on a month on month basis at 290,879 units (December 2019: 215,716) but on a year on year basis there is a drop of 4.61 percent YoY (January 2019: 304,929). The CV segment too jumped over 20% month on month at 82,187 units but year on year CVs slipped close to 7%(December 2019: 67,793, January 2019: 88,271).

Commenting on the performance, Ashish Harsharaj Kale, president, FADA said, “Auto sales continue to be in the negative territory in the month of January, except for three-wheelers, with many consumers still not concluding on their decisions. The ongoing transition of BS IV to BS VI is also a factor in delayed purchase decisions."

The auto retail body says that overall economic sentiment continues to be weak and even the recently announced Budget, although an inclusive budget with growth drivers for the mid- to long-term, did not have any direct measures nor any immediate growth spurring initiatives for the auto sector.

"With continued weak consumer sentiment and the overall economic situation, as well as the upcoming BS VI transition, the near-term demand situation will continue to be dynamic. We appeal to the government to continue announcing positive measure, specifically for the auto industry, as well as for the overall economy, which will help us return to growth trajectory at the earliest,” said Kale.

It may be recollected that the appeal filed by FADA in the Supreme Court for extension of sale beyond March 31 for dealer stock was declined on February 14, thus putting the tough task on the dealer fraternity to sell the BS IV stocks before April 2020. FADA had appealed to all OEMs to switch over completely to BS VI despatches. In addition, the retail body has requested OEMs through the Society of Indian Automobile Manufacturers (SIAM) that any BS IV vehicle, billed further, which are not against specific customer orders, be on a returnable basis to avoid financial loss to its members.

FADA says for the first time it has shared the registration numbers for the tractor segment, thereby covering the entire mobility spectrum.