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February retail truck sales turn positive

Published On Mar 13, 2020By Trucksdekho Editorial Team

After a prolonged downturn, February retail truck sales turned positive, BS4 truck inventory at reasonable levels. 

The latest monthly data released by the Federation of Dealers Association of India (FADA) points towards a 13% uptick in February retail of trucks sale. On a YoY basis, overall vehicle registrations grew by 2.60%. 2W, 3W, trucks and tractors were up by 1.5%, 20.7%, 13% and 13.52% respectively in the month. Only the passenger vehicles segment registered a drop of 1.17%.

Speaking on the Industry’s performance in the month, FADA President, Ashish Harsharaj Kale said, “February turned positive for retail sales for most of the segment as the entire auto eco-system, especially the dealers, focussed on liquidation of their BS-IV stocks. Rural sales contributed to retail sales turning green with tractors also being in double-digit growth for 2nd month in a row.  Despite YoY Growth, the overall retail sales were much below expectations as the expected pre-buying for the BS-IV stocks was not seen. Many customers held onto their purchase decision expecting sweeter deals towards the end of March.”

2W inventory a concern

According to FADA, the inventory levels of commercial vehicles and passenger cars are at reasonable levels; however, the 2W inventory is a concern as most of the dealers will find it hard to liquidity the complete stock by March 31st.   

“On the inventory front, 2W inventory of BS-IV Vehicles remains a very serious concern for FADA. With the Hon’ble Supreme Court not considering our application for sale extension for BS-IV, FADA seriously urges Our 2W OEM’s to handhold the dealers for 100% liquidation of their BS-IV Stocks. FADA survey reveals a very high number of 2W dealers will not be able to fully liquidate their BS-IV inventory and expressed inadequate support from their OEMs for 100% liquidation of this stock”, says FADA.

With regards to PV and CV Inventory, the Overall Inventory is at a reasonable level, but the challenge remains in slow-moving, non-popular models as dealers look for adequate OEM support for liquidation of the same in the month of March. FADA has already advocated for the return of unsold BS-IV stocks and will be pursuing this for its members, If the need arises, as many dealers Will be unable to sustain such losses, feels FADA.

Outlook for March

With Banks & NBFC’s getting into a cautious mode with regards to financing BS-IV stocks and many RTO’s across the country, prescribing their 0wn cut off dates for permanent registration, retails of 100% of dealer inventory of BS-IV stocks continue to be a challenge. Dealers are now facing a new challenge with coronavirus cases being detected in India and an alarming drop in customer walk-ins in Showrooms. The overall uncertainty of the situation due to coronavirus and the huge drops in the share markets, further contribute to the already weakened sentiment as purchase decisions are getting postponed.

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