Vehicle registration data for November 2019 released by Federation of Automobile Dealers Associations (FADA) reveals that two-wheeler segment registered 5.56% YoY growth in the month. This is good news for OEMs and dealers, as two-wheeler sales continue to be buoyant for second consecutive month.
Earlier, it was being speculated that sales might decline again after festive season rush in October, Thankfully, that has not happened. However, FADA has asked dealers to remain cautious in view of fluctuating consumer sentiment and the upcoming transition to BS-VI fuel emission norms.
A total of 17,52,369 two-wheelers were sold in November 2019, an increase of 92,287 units in comparison to November 2018 figures. FADA President, Mr Ashish Harsharaj Kale said that demand is picking up in rural areas, as agricultural produce is making its way to the markets.
Farmers now have more cash with them to buy things they need. Earlier, supply of agriculture produce was reduced due to extended monsoon. The uptick in two-wheeler sales can also be seen in semi-urban areas.
Out of the top ten contributing states, seven states have registered positive YoY growth. Uttar Pradesh leads the pack with sales of 2,63,877 units in November 2019. This translates into 15.06% share of the pie and YoY growth of an impressive 19.38%. Sales in November last year stood at 2,21,036 units.
At number second is Maharashtra with sales of 2,13,791 units. The state has contributed 12.20% to overall two-wheeler sales and registered YoY growth of 9.67%. At number three is Rajasthan with sales of 1,88,711 units, translating into 10.77% share and YoY growth of 11.60%.
Other states in top ten list with positive growth include Tamil Nadu (1,44,692 units; 1.51% YoY growth), Bihar (1,14,504; 7.53%), West Bengal (96,804; 24.42%), and Haryana (77,419; 46.68%). States with negative growth in top ten list include Gujarat (1,09,534; -21.80%), Karnataka (99,684; -14.28%), and Punjab (78,393; -5.86%).
In terms of average inventory, FADA is satisfied with 25-30 days in November. This is close to the targeted 3 weeks of average inventory. In October also, average inventory levels were in the same range. FADA is hopeful that average inventory of three weeks could be achieved in the coming months. FADA has thanked OEMs for reducing wholesale billing and expects further cuts in the future.
In FADA’s online survey covering all automobile dealers, it has been revealed that sentiments across dealerships are yet to reach normal levels. While 38% dealers rated the current situation as bad, 49% said it was neutral. In terms of liquidity, 30% rated it as bad whereas 53% said it was neutral. 43% dealers expect that situation will remain the same in December whereas 23% expect further growth. 34% expect growth to turn negative in December.