Festive Season Boost In Oct: Personal Vehicles Up By 11%, 2-Wheelers By 5%, 3-Wheelers By 4%; CVs Down By 23%

Festive Season Boost In Oct: Personal Vehicles Up By 11%, 2-Wheelers By 5%, 3-Wheelers By 4%; CVs Down By 23%A car showroom in India (Representative image) (Daniel Berehulak via Getty Images) 

In a positive sign for the auto industry, vehicle registration in October rose by 4 per cent on year-on-year basis, largely on the back of festival demand, showed the data released by the Federation of Automobile Dealers Association (FADA).

Although, the overall record was positive, registration of commercial vehicles registered a de-growth of 23 per cent. Registration of personal vehicles rose by 11 per cent in October, compared to a year ago period and that of two-wheelers and three-wheelers were up 5 per cent and 4 per cent.

"October vehicle registrations finally show a positive momentum with the biggest two festivals of Navratri/Dussehra and Diwali being in the same month. Attractive offers boosted the overall positive mood of the buyers," an FADA statement said.

Overall inventory also declined last month. The inventory of personal vehicles saw a marginal drop reaching the "ideal mark ", the statement said.

Average inventory for personal vehicles was in the range of 25-30 days, down from 30-35 days in September, and that of commercial vehicles to 40-45 days, from 50-55 days in the previous month.

Commenting on the performance, FADA President Ashish Harsharaj Kale said: "PV inventory, already at reasonable levels, has further reduced and now almost at the recommended level with all our principals taking strong and positive steps towards stock reduction. CV inventory also reduces although with retails continuing to be weak, further wholesale regulation is required to reach FADA's 21 days recommended levels.

Many auto sector attribute the slowdown in commercial vehicles to a variety of reasons. The sharp drop in truck sales is substantially the result of a huge gain in productivity after the implementation of GST.

With the old octroi and other check-posts gone, turnaround time for trucks has dropped by at least a fifth, which means the same truck can now be used to do more trips per month.

Another productivity booster was the decision of the road transport ministry last year to raise the permissible gross vehicle weight (GVW) of 16-tonne trucks by about 12-25 percent. This is said to have dampened demand for new trucks even more than the GST turnaround savings.

"Heading into the unknown territory of BS-VI transition, more needs to be done towards inventory reduction to avoid dealer losses. October retails were in the positive, giving a much-needed respite to the auto industry, especially our dealer community, after months of de-growth," he said.

(With inputs from IANS)