The Federation of Automobile Dealers Associations (FADA) voiced its concern over the dampened festive season and the de-growth which the automobile industry is currently staring at.
FADA President, Ashish Harsharaj Kale said, “We have not seen such a dull festive season, in the past few years as many negative factors came into play during this season which weakened the consumer sentiment and postponed their purchase decision. It is a matter of deep concern for our dealership community.”
Higher de-growth was seen in the Navratri and Dussehra festivals, especially in two wheeler and passenger vehicles. With fuel prices starting their downward trend in October end, Diwali season saw a sales uptick, especially in two wheeler but overall, we have seen unusual de-growth during the combined festive period, both in two wheeler and Passenger Vehicle. Dealer inventory levels in both these segments have risen substantially as a result of this and is a matter of great concern.
Commercial vehicle sales which have been growing at a very good rate, still remained positive in their sales growth, but some demand softening could be seen in CV’s too as the growth percentage has come down during this period. The ongoing NBFC Liquidity issue also is a concern for all the segments and especially for the two wheeler and commercial vehicle segment where we are seeing a cautious approach from the NBFC’s during and post Diwali season. The association hopes that with the recent liquidity measures taken by the RBI and the Government, Auto NBFC’s and Banks would be better placed to continue their strong support to auto retails, which contributed majorly for the industry to grow at a healthy rate from April-Sept.
“We request the Government and the RBI for further ease of liquidity for Auto NBFC’s, as they are one of the key growth drivers in Auto Retail and are also operating in a less riskier business environment than Infra and Housing NBFC’s due to the short repayment cycle of Auto Loans and the Mobility of the assets,” FADA President said.