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Healthy Auto Sales In March Helps Bring Down Piling Inventory: FADA

April 13,2019

As per FADA (Federation of Automobile Dealers Associations), which collects monthly vehicles registration data from 1,170 out of 1,441 regional transport offices (RTO) in the country, the retail inventory with auto dealers now ranges from 40 to 50 days across segments, with 30 days being the norm.
There was an 8% drop in Mar-19 sales as compared to Mar-18 sales as per the vehicle registration data released by FADA. The interesting part was that Mar-19 sales were up by 8% compared to Feb-19 sales which has come as a big relief for dealers due reduction in their inventory carrying cost.
The President of FADA, Mr. Ashish Kale commented that the Indian Auto Sector has managed to close FY19 on a positive note with all the vehicle segments echoing positivity in March as compared to February sales. The major contributor was the 2-Wheeler segment which registered a healthy growth of 10% which indicated a slight improvement in consumer sentiment and liquidity availability.

During the month of March, major OEMs observed production cuts to help reduce the inventory with auto dealers, especially in the scooters segment, where the production was cut by half. "FADA appreciates and applauds the bold steps taken by a majority of OEMs for regulating production to current demand and helping dealers in reducing inventory," the body said in its release.
While there was not a major decline in new enquiries at dealerships but the enquiry to sales conversion has gone down in Mar. This has affected the enquiry to conversion ratio across the board. Although the current customer sentiment is negative-to-neutral for purchase decision, consumers’ interest in automobiles still remains reasonably robust.

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Author - Vikram