The Federation of Automobile Dealers Associations (FADA) noted in its Monthly Vehicle Registration Data for the Month of June 2019 that Q1FY20 ended on a negative note as Total Vehicle Registrations for the quarter decreased by -6% YoY. Commercial Vehicles or CV segment leads the de-growth at-14% followed by 2W at -6.4% and 3W at-6.1%, says FADA. Passenger Vehicles or PV dropped the least at -1%. For the month of June, sales were negative both YoY and MoM with MoM drop seen higher with delay in monsoon and continued liquidity tightness affecting consumer sentiment and on YoY basis, Total Vehicle Registrations fell -5.4%, with CV falling -19.3%, 2W -5%, PV -4.6% and 3W 2.8%.
PV inventory levels continue to decrease giving the much-needed respite, but 2W and CV inventory increases further and continues to remain a serious cause of worry for Auto Dealers. Budget Provisions Taken for Liquidity easing yet to take effect as tight liquidity situation continues coupled with Delayed and Deficient Monsoon for June lead to weakening of overall sentiments from previous month.
PV manufacturers continued to reduce wholesale Billing to Dealers as well as regulated production in the month of June hence helping Dealer Correct the High Inventory. With the current trend continuing for a couple of more weeks, inventory in PV's will for the first time since the downturn will come down to healthy levels of around 4 weeks across many geographies and heading towards the FADA Recommended and Requested levels of 21days or 3 weeks.
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