Unlike passenger vehicles and the two wheeler segment, which recorded decline in sales – CV segment has registered increase in sales
Commercial vehicle registration data for February released by Federation of Automobile Dealers Associations (FADA) reveals that YoY sales have increased by 6.91%. A total of 87,805 units were sold in February 2020, as compared to 82,129 units in February last year.
This is encouraging development for CV manufacturers, as YoY sales growth in January 2020 was negative. A total of 82,187 units were sold in January 2020, which translates into negative YoY growth of -6.89%, as against 88,271 units sold in January last year. Maharashtra leads the pack in CV sales, with 11,044 units sold in February 2020. This translates into YoY growth of 1.48%, as against 10,883 units sold in February last year.
At number two is Bihar with sales of 8,094 units. YoY growth is an impressive 68.03%, as against 4,817 units sold in February last year. At third spot is Uttar Pradesh with sales of 8,055 units. This translates into negative YoY growth of -7.30%, as against 8,689 units sold in February last year.
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In the list of top ten contributing states, Rajasthan is the only other state with negative growth. A total of 5,776 CVs were sold, which is negative growth of -2.56%, as against 5,928 units sold in February last year. Other states in the top ten list include Tamil Nadu (7,779 units), Karnataka (6,625), Gujarat (5,928), West Bengal (5,815), Haryana (5,165), and Odisha (4,445). Maximum growth in percentage terms has been recorded in Ladakh, where sales have grown 966.67%, up from 3 units to 32 units.
Another positive aspect for CV dealerships is that average inventory in February 2020 was in a healthy range of 10-15 days. This is well below the FADA recommended 21 days of average inventory. It’s also an improvement from January 2020, when average inventory was hovering in the range of 25 – 30 days. It may be recalled that average inventory for CVs was even worse at 30 – 35 days in December 2019. FADA has consistently worked with all stakeholders to bring average inventory to manageable levels.
In its report, FADA has pointed out that CV dealerships continue to have unsold stock of BS4 models. As much of this inventory may remain unsold, especially non-popular models, it can cause significant losses to dealerships. FADA is currently working with OEMs to achieve 100% liquidation of BS4 inventory. FADA has advocated that dealerships be allowed to return BS4 stock in case they remain unsold. FADA has also pointed out to coronavirus epidemic, which is adversely impacting the entire auto sector.
To help the ailing auto sector, FADA has requested the government to launch a robust relief package. FADA believes that things like financially attractive scrappage policy and reduction in GST rate can help OEMs and dealerships. A resurgent auto sector will also benefit the economy, FADA said.