The Federation of Automobile Dealers Associations (FADA) today released the Monthly Vehicle Registration Data for June 2019.
June 2019 Retail Sales
Commenting on the performance, FADA President Mr. Ashish Harsharaj Kale said, “Despite beginning the month with a positive outlook, retail sales ended in a de-growth due to continued liquidity tightness and a delayed monsoon. While inquiry levels remained reasonably strong, actual retail conversions were impacted by weak consumer sentiment, leading to purchase postponements across all segments.”
Key Highlights of Vehicle Registrations in June 2019
- Overall, the states with the highest vehicle registrations were Uttar Pradesh (2,93,905), Maharashtra (1,56,716), and Tamil Nadu (1,49,698)
- In the Passenger Vehicle (PV) category, the top states were Uttar Pradesh (30,358), Maharashtra (24,806), and Karnataka (18,288)
- In the Two-Wheeler (2W) category, the leading states were Uttar Pradesh (2,55,812), Tamil Nadu (1,24,534), and Maharashtra (1,18,453)
- In the Three-Wheeler (3W) category, the top states were Uttar Pradesh (7,735), Maharashtra (7,285), and Gujarat (4,960)
- In the Commercial Vehicle (CV) category, the highest registrations were recorded in Tamil Nadu (6,500), Maharashtra (6,172), and Karnataka (4,633)
Dealer Inventory
Passenger vehicle manufacturers continued to reduce wholesale billing to dealers and regulated supply during June, helping dealers correct high inventory levels. If this trend continues for a few more weeks, PV inventory is expected to reach healthy levels of around four weeks across several geographies, moving closer to FADA’s recommended benchmark of 21 days (three weeks).
This new norm of maintaining inventory at 21 days will support dealer viability and profitability, especially amid rapidly changing market dynamics. FADA acknowledged and appreciated the proactive steps taken by passenger vehicle manufacturers in supporting dealers.
However, stricter regulation of wholesale billing is still required from two-wheeler and commercial vehicle manufacturers, as inventory levels in these segments remain elevated. Two-wheeler dealers, in particular, have been under sustained inventory pressure since September 2018, marking the beginning of the downturn.
With ongoing pressure on dealer working capital and declining sales, the situation could become critical if not addressed promptly. FADA has urged 2W and CV manufacturers to take immediate corrective measures to regulate wholesale billing and help channel partners manage inventory efficiently.
