The slump in auto sales has worried the auto industry. The latest data released by the Federation of Automobile Dealers' Association (FADA) shows that retail sales in the 42-day festive period this year were flat compared to last year.
According to Live Mint, the Federation of Automobile Dealers Association (FADA) released data in which it can be seen that during the 42-day festivals this year, retail sales of vehicles across categories fell 2% year-on-year (y-o-y) to 2.41 million units. Festive season retail performance is crucial for the domestic industry since it comprises a third of annual sales. According to FADA, festive season starts from the first day of Navratri and ends after two weeks with Diwali.
According to Federation of Automobile Dealers Associations (FADA), passenger vehicles (PV) sales stood at 2,23,498 units in October 2018. Two-wheeler sales increased 5 per cent to 13,34,941 units last month as compared with 12,70,261 units in the year-ago period. Commercial vehicle sales, however, declined 23 per cent to 67,060 units as compared to 87,618 units in October last year. Three-wheeler sales saw an increase of 4 per cent to 59,573 units last month. Total sales across categories rose 4 per cent to 17,09,610 units in October, as against 16,38,832 units in the same month last year.
Among the worst performers were motorcycles and scooters, wherein the combined sales fell 2% y-o-y to nearly 1.9 million units. Cars and utility vehicles fared better notching a 1% increase to 343,000 units. However, commercial vehicle sales, which are often seen as a barometer of economic growth, crashed 18% from the year earlier. This was partly due to an increase in the freight carrying capacity or cargo loads allowed on vehicles by the centre.
Subdued sales of automobiles in two consecutive festive seasons underscore lack of overall economic activity. Moody’s Investors Service had recently downgraded India’s sovereign credit rating to negative from stable. Institutions, such as the Reserve Bank of India, and some credit rating firms have also downgraded the estimated growth in India’s gross domestic product, due to the prolonged slowdown, reported Live Mint.