Retail auto sales improve in August on festival demand

Retail auto sales improve in August on festival demand

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MUMBAI: Retail automobile sales recovered in August and narrowed the gap with levels a year earlier as demand improved during festivals such as Ganesh Chaturthi and Onam, according to vehicle registration data.

Vehicle registrations in the country increased by 4% in August from July. They fell 27% from a year earlier, an improvement over July, when sales declined 36%.

“With the start of the festival season and the government’s continued efforts to open up India, the month of August saw good numbers when compared to previous months,” said Vinkesh Gulati, president of the Federation of Automobile Dealers’ Associations, a lobby of vehicle retailers.

“Apart from the rural market, which was showing revival signs until now, urban centres for the first time showed initial signs of demand pullback.”

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The sharpest recovery was in passenger vehicles, with sales dipping 7% to about 178,500 units from August 2019. Two-wheeler sales dropped 29% from a year ago, while three-wheeler and commercial vehicle sales declined 70% and 58%, respectively. Tractor sales were higher than a year earlier for the third straight month due to good monsoon rain and better rural sentiment.
FADA compiled the data from the road transport and highway ministry’s VAHAN platform, which captures vehicle registrations from 1,242 of the country’s 1,450 regional transport offices. Some states are yet to migrate to the platform.

The recovery momentum may break in September, Gulati said, because some communities consider the first 17 days of this month inauspicious. During this period, retailers will focus on following up customer leads and getting orders for October and November in anticipation of festivals like Navratri and Diwali. Automobile manufacturers plan record production for September-November, when they expect substantial demand recovery, ET reported earlier this month.



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