Retail auto sales fell for the eighth straight month during the seasonally weak monsoon period as buyers stayed away and financing remained tight.
Vehicle registrations, a measure of sales at dealerships, fell 1.8 percent month-on-month and 8.2 percent on a yearly basis in July, according to data from 1,171 regional transport offices in 31 states and union territories collated by BloombergQuint from the website of the Ministry of Road, Transport and Highways. Sales have been falling on a monthly basis since November.
That was reflected in a BloombergQuint survey of 10 large automobile dealers that found that sales of cars, scooters and motorcycles declined in July, suggesting consumption and discretionary spending hasn’t revived. Inventory levels of two-wheelers remain higher than for cars, the survey found. Average inventory period for two-wheelers was two months, twice as much as for cars.
But there is a silver lining. Retail sales rose month-on-month for three-wheelers, trucks and tractors in July—the volumes, however, fell over a year earlier, according to the registration data.
It reflects the number of vehicles sold after all payments and statutory dues and insurance costs, and excludes bookings.
Number of units sold at dealerships fell 2.7 percent month-on-month and 7.4 percent year-on-year in July to 12.9 lakh. Decline in auto financing by non-bank lenders has hit sales of two-wheelers, BloombergQuint’s survey revealed.
Car sales tumbled 5.4 percent over the previous month and 11 percent on a yearly basis to 1.88 lakh units in July.
Weak finances and higher working capital requirements have been hampering capacity of dealers, forcing them to offer discounts to pare inventory, the survey revealed. Carmakers have also cut production in the last few months to ease stress.
Sales of tractor jumped 21.4 percent sequentially. The volumes fell 19.4 percent over a year earlier.
Commercial vehicle registrations saw a marginal uptick in July over June, though they fell 10 percent on a yearly basis. Bus sales fell 7 percent sequentially, while demand for goods carriers rose marginally.
Sales of three-wheelers rose 12.8 percent month-on-month but fell marginally over a year earlier. The sequential jump was led by demand for passenger three-wheelers, which rose 15 percent.
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