Auto Retail Sales Experience a Significant Drop

In February, the automobile retail sector faced a challenging period, with sales across various categories, including passenger vehicles and two-wheelers, dropping by 7%. This decline is attributed to weak consumer demand, as reported by the dealers' body FADA on Thursday. The domestic market saw retail sales of 18.9 lakh units, a decrease from the 20.5 lakh units sold in the same month last year.

Challenges Across All Categories

FADA president C S Vigneshwar highlighted a broad-based downturn across all vehicle categories. Dealers voiced concerns over being pushed inventory without consent, emphasizing the need for wholesale allocations to align with genuine demand to safeguard dealer viability and ensure healthy inventory management.

Passenger Vehicles and Two-Wheelers Hit Hard

Passenger vehicle retail sales saw a 10% year-on-year decline to 3 lakh units in February, with dealers pointing to weak market sentiment, especially in the entry-level category, and delayed conversions. Two-wheeler sales also fell by 6% year-on-year to 13.5 lakh units, down from 14.4 lakh units in February last year. Factors contributing to this decline include inventory imbalances, aggressive pricing adjustments, weak consumer sentiment, lower enquiry volumes, and limited finance availability.