Weak consumer demand pulled down passenger vehicle sales by 9 per cent in December after two months of growth despite promotional offers and discounts.
According to the Federation of Automobile Dealers Associations (Fada), passenger vehicle sales stood at 2,15,716 units in December 2019 compared with 2,36,586 units a year ago.
Fada president Ashish Harsharaj Kale said the deceleration in December sales was not on expected lines as the inquiry levels throughout the month were quite robust.
“The sharp decline in growth has denied the dealer community an opportunity to reduce its BS-IV inventory, making the transition to BS-VI trickier,” Kale said.
Two-wheeler sales declined 16 per cent to 12,64,169 units last month from 15,00,545 units in December 2018.
Commercial vehicle sales declined 21 per cent to 67,793 units compared with 85,833 units in December 2018.
With such weak consumer sentiment, Fada said its members need to be very cautious and focus on reducing BS-IV inventory.
“Fada will work towards seeking relief from the Supreme Court for the BS-IV inventory of its members as with such weak consumer demand, the near-term retail sales are unpredictable, making it extremely difficult for our members to continue the current business and also ensure a nil BS-IV inventory on March 31,” Kale noted.
The commercial vehicle and two-wheeler inventory also is a concern, he added.
Besides, dealers as well as retail customers are facing liquidity troubles as the banking industry continues to be in cautious mode, Kale said.