Two-Wheelers Worst Hit as Automobile Sales Drop 7.5% From May 2018: FADA
T.E. Narasimhan
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Chennai: Automobile sales dropped by 7.5% to 17,71,920 units in May as compared to the same period last year, automobile dealers' body Federation of Automobile Dealers Associations (FADA) said on Friday.
Two-wheeler sales took the biggest hit, followed by commercial vehicles, passenger car and then three-wheeler.
Dealers said de-growth continued in the second month of this fiscal as all automobiles categories saw lower year-on-year sales as overall consumer sentiment continued to be in the neutral to bad category.
Highest vehicle registration took place in Uttar Pradesh at 281,175 units, followed by Maharashtra (1,99,509) and Tamil Nadu (158,433).
Also read: The Slowdown in India’s Consumption Growth Story
According to FADA, while inventory came down in the passenger vehicle sector, there was no respite for two-wheeler dealers.
FADA president Ashish Harsharaj Kale said that even though there was an uptick in vehicle registrations in month-on-month basis, all categories of vehicles de-grew when compared on a year-on-year basis. He noted that May last year had a very high base and had witnessed the second highest registrations on a monthly basis in the last fiscal.
"With the current liquidity, both for consumer and dealer still in a tight situation, the near-term outlook of 4-6 weeks continues to remain negative," he added.
| Category | May '19 | May '18 | April '19 | YoY(%) | MoM(%) |
| 2W | 14,07,361 | 15,40,377 | 13,25,845 | -8.6% | 6.1% |
| 3W | 50,959 | 53,108 | 48,146 | -4.0% | 5.8% |
| CV | 62,551 | 67,847 | 64,019 | -7.8% | -2.3% |
| PV | 2,51,049 | 2,53,463 | 2,50,501 | -1.0% | 0.2% |
| Total | 17,71,920 | 19,14,795 | 16,88,511 | -7.5% | 4.9% |
"The current situation continues to be worrisome and consumer sentiment continues to be negative. With liquidity still an issue and the new government getting settled and in the process of planning and rolling out new initiatives coupled with delay in monsoon by 10-12 days, we expect the near term outlook of the next 4-6 weeks to be similar to last month with overall auto retails continuing to be under strain across all verticals," said Kale.
FADA is hopeful of consumer sentiment moving out of the negative territory in the next eight to ten weeks, he added.
By arrangement with Business Standard.
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