Overall two wheeler sales in India have registered a minor increase during Feb 2020
As per vehicle registration data released by Federation of Automobile Dealers Associations (FADA), two-wheeler sales have registered YoY growth of 1.52% in February 2020. Sales have increased from 12,66,163 units in February last year to 12,85,398 units in February 2020. While this is heartening for two-wheeler dealerships, it is not exactly as per expectations.
Two-wheeler dealerships were expecting increased sales of BS4 models, as many of these are currently being offered with attractive discounts and benefits. However, consumers appear to be holding their purchase decision in anticipation of even better deals in March. As BS6 deadline nears on March 31, customers are hoping that dealerships will increase discounts and benefits to clear BS4 stock.
|17||Jammu & Kashmir||12,144||3,428||8,716||254.26|
|30||Daman & Diu||94||1,208||-1,114||-92.22|
Another of FADA’s concern is the huge inventory of BS4 two-wheeler models. It may be recalled that FADA had filed an application with the Supreme Court to extend the March 31 deadline for sale of BS4 vehicles. However, the same was rejected by the court. In its survey, FADA has found that a significant number of dealerships will not be able to clear their stock of BS4 models. Dealerships also said that they are not getting adequate support from OEMs to help clear BS4 inventory. FADA has urged OEMs to handhold dealers, so that 100% liquidation of BS4 stock can be achieved.
State-wise two-wheeler sales data released by FADA shows that Uttar Pradesh sold the maximum number (2,16,360) of two-wheelers in February 2020. This translates into YoY growth of 11.63% in comparison to 1,93,827 units sold in February last year. Next in the list is Tamil Nadu, with sales of 1,48,171 units. This is YoY loss of -7.88%, as against 1,60,844 units sold in February 2019. At third place is Maharashtra, registering YoY growth of 3.44%. Sales have grown from 1,21,127 units to 1,25,298 units.
Out of the top ten contributing states, five have registered positive growth while the other five have negative figures. West Bengal (22.81%), Bihar (13.38%) and Rajasthan (1.07%) have registered positive YoY growth, while Karnataka (-10.90%), Gujarat (-6.63%), Odisha (-6.89%) and Chhattisgarh (-6.08%) have negative growth.
Average inventory for two-wheelers is currently in the range of 20-25 days, which is the same as that of previous month. FADA has mandated 21 days of inventory for two-wheelers, so the current situation seems under control. The only worry is BS4 inventory, something that FADA will try to resolve in consultation with OEMs. FADA does not want any dealership to bear the burden of unsold BS4 stock, which is why discussions are on with respective OEMs.
FADA has also expressed concern over Coronavirus pandemic, which is adversely affecting consumer sentiments. In view of these factors, the overall outlook for March remains negative.