In its vehicle registration report for September 2019, FADA (Federation of Automobile Dealers Associations) has mentioned that high inventory levels of two-wheelers continue to be a serious concern. There has been no improvement in two-wheeler inventory levels, which continue to range from 60 to 65 days. As per FADA recommendations, two-wheeler inventory level should ideally be 21 days.
Overall two-wheeler sales in the country were down -12.06%, from 12,48,998 units in September 2018 to 10,98,381 in September 2019. Only three out of top ten contributing states have recorded positive YoY growth in two-wheeler sales.
FADA President, Mr Ashish Harsharaj Kale said that unexpected unseasonal rains in various parts of the country and ‘Shraddh’ period in September may have adversely impacted sales. Moreover, effects of positive decisions taken by government such as corporate tax rate cut are yet to materialize. It may take some more time for these developments to have a bearing on two-wheeler sales.
In view of high inventory levels of two-wheelers and the upcoming transition to BS-VI, FADA has urged two wheeler manufacturers to regulate wholesale billing. FADA said that situation at the ground level should be realistically assessed and wholesale billing needs to be adjusted accordingly to avoid high inventory levels.
Two-wheeler registration data for September reveals that maximum sales are from Uttar Pradesh. 1,91,217 two-wheelers were sold in the state in September 2019, which translates into YoY loss of -5.62%, as compared to sales in September 2018. Other top contributors include Tamil Nadu (1,20,115 units), Maharashtra (1,11,684), West Bengal (92,410), Karnataka (82,171), Bihar (75,653), Gujarat (63,652), Rajasthan (63,592), Odisha (49,498) and Punjab (43,826).
Among the top ten contributors, West Bengal, Bihar and Odisha have recorded positive YoY growth of 102.59%, 14.71%, and 12.30%, respectively. Other states in the overall list with positive YoY growth include Assam (2.61%), Chhattisgarh (5.16%), Mizoram (50.00%), Manipur (14.55%), Meghalaya (10.54%), Arunachal Pradesh (55.31%), Nagaland (7.06%), D & N (9.92%) and Sikkim (80.80%).
Despite negative YoY growth in September, FADA is hopeful that sales will start improving from October onwards. FADA mentioned that there is increased activity at dealer level on account of festive season and two-wheeler sales might start to stabilize in the coming months.