The Federation of Automobile Dealers Associations (FADA) today released the Monthly Vehicle Registration Data for the Month of June 2019. According to the FADA report, last month, the total Vehicle Registrations fall 5.4 per cent. This includes a drop of 4.6 per cent in passenger vehicle sales, and 5 per cent in two-wheeler sales, while commercial vehicles and three-wheelers sales both saw a decline of 19.3 per cent and 2.8 per cent, respectively. In the month of June, even Month-on-Month sales saw a drop with delay in monsoon.
Commenting on June'19 performance, FADA President, Mr Ashish Harsharaj Kale said, "Despite starting the month with a positive outlook and hope, the monthly sales ended in de-growth due to continued liquidity tightness and a much-Delayed monsoon. Despite Inquiry levels being reasonably strong, Retail sales got affected as consumer sentiment continued to be weak and purchase postponement was seen across all segments"
Out of the total vehicles registered in India, Uttar Pradesh was the state with the highest vehicle registrations last month at 2,93,905 units. Maharashtra and Tamil Nadu had the second and third highest registrations at 1,56,716 units and 1,49,698 vehicles, respectively. In PV category, the States with highest registrations were Uttar Pradesh (30,358), Maharashtra (24,806) and Karnataka (18,288) and even in two-wheeler category, UP again took the lead at 2,55,812 vehicles, followed by Tamil Nadu (1,24,534) and Maharashtra (1,18,453). In CV category, however, the States with the highest registrations were Tamil Nadu (6,500), Maharashtra (6,172) and Karnataka (4,633).
All that said, amidst falling sales, dealers found a bit of relief as car manufacturers continued to reduce wholesale billing and regulate production in the month of June. hence helping Dealer Correct the High Inventory. The current trend is expected to continue for a couple of more weeks, thus enabling dealerships to bring down their inventory to healthy levels of around 4 weeks across many geographies and heading towards the FADA recommended and requested levels of 21 days or 3 weeks.
On the Liquidity front, Kale said, "Liquidity still continues to be a worry, both at the retail front as well as the for Dealer Working Capital. With NBFC's and Banks still in a cautious mode, the Normalcy in Lending which is required to get us back to growth still cannot be seen." He further added, "We hope that with the recapitalisation of Nationalised Banks announced in the Budget by the Hon'ble Finance Minister as well as the 1 lakh Crore Funding window opened up for Stable NBFC's, we will see the Over Cautious Approach diminish and return of Banking and NBFC Industry to Normal ,which is much required for growth of Auto Retails".