Tag - FADA

December is a big month for PVs: Ashish Kale, President, FADA

Update on the Indian Equity Market:

On Monday, NIFTY closed -0.1% lower. Among sectoral indices NIFTY PSU Bank (-1.3%), NIFTY Realty (-0.4%), and NIFTY FMCG (-0.5%) closed lower. while NIFTY Media (+0.9%) NIFTY Auto (+0.6%) Nifty Fin Services (+0.2%) closed on a positive note. The biggest losers were Yes Bank (-3.8%), Nestle (-2.4%), Reliance (-1.8%) whereas Zeel (+3.6%), Vedanta (+2.4%), Maruti (+1.6%) ended with gains.

Excerpts from an interview of Mr. Ashish Harsharaj Kale, President of Federation of Automobile Dealers Associations (FADA) with CNBC-TV18: 

  • Mr Kale said not just the companies, but even the dealers are currently at an inventory of 30-40 days.
  • The availability of fuel is now clear that it is going to be available only from April 1, pan India so most of the manufacturers have planned 100 percent production shift only by end of February or first week of March. So, dealers will continue to buy BS-IV vehicles and it will give a very short window of a month to liquidate the entire inventory.
  • Speaking about companies with larger inventories he said the Society of Indian Automobile Manufacturers (SIAM) would be better placed to talk about the inventory. About dealer inventory, the passenger vehicle (PV) inventory is at 30 days and both two-wheeler and commercial vehicle (CV) is at 40 days.
  • The demand situation in December is good but conversions have just started.
  • December is a big month for PV because of the year-end combined discounts that come in.
  • For two-wheelers and CVs enquires are coming.
  • Speaking about price hikes due to BS-VI transition, he says, few vehicles have already launched and the cost difference is between 10% to 13%.
  • In case of CVs the price change is anticipated to be in between 12% to 14%, although none of the manufacturers have come up with a BS-VI pricing.

Festive season: A hope for automakers

Update on the Indian Equity Market:

On Wednesday, NIFTY closed 0.1% higher. Among sectoral indices NIFTY PSU Bank (+2.1%), NIFTY Auto (+1.3%), NIFTY IT (+1.0%) closed higher while NIFTY Media (-1.3%), NIFTY Realty (-0.9%), NIFTY Metal (-0.3%) ended on a negative note. The biggest gainers were HCL tech (+3.5%), Eicher Motors (+2.5%), Infosys (+2.3%) whereas Adani Ports (-6.1%), Bharti Airtel (-3.7%), Zeel (-3.4%) ended with high losses.

Excerpts from an interview of Mr Vinkesh Gulati, Vice President FADA (Federation Of Automobile Dealers Association)

  • The entire auto sector in our country has shown a downturn. With all major OEM’s showing a decline in number, it is the festive season which gives hope to automakers.
  • Mr Gulati says sentiment during festive season goes up and enquiries start to come in. Passenger vehicle (PV) segment is showing similar signs this year too.
  • It is expected that better conversions will happen as compared to the last six months.
  • He says the two-wheeler market is not showing good signs. The overall situation in the two-wheeler market is grim.
  • In the past year, the passenger vehicle (PV) segment has shown decline of 8-10 percent. This year the expected decline is less 1-2 percent or similar as last year.
  • The two-wheeler segment is expected to degrade and continue to decline around 8-12 percent.
  • Mr Gulati says the reason behind the decline of the 2-wheeler segment is because it is a reflection of rural and semi-urban market sentiment.
  • 2 wheelers segment is majorly based in the rural and semi-urban market and the sentiment there is still not changed. Rural market is still not picking up festive hype.
  • He says Automakers are offering steep discounts to increase sales and the festive season is the best time to buy.
  • Speaking on the discount front, he says, discounts are similar to what they were in Navratri. Furthermore, discount is given by dealers on their own to liquidate their inventory.
  • From December onwards it is expected that all OEM’s will come out with their BS-VI variants and again during December there will be discounts on BS-IV to liquidate inventory.