Weaning-off degrowth: FADA hopes to see auto retail sales growth in Oct

India's auto sector retail off-take might gather steam by October, as festive season along with restoration of supply chains augment demand, Federation of Automobile Dealers Associations' (FADA) newly elected President Vinkesh Gulati told IANS.

However, Gulati pointed out that sales acceleration will depend upon the pandemic's future impact and restoration of the entire supply chain.

Gulati was elected as FADA President.

In his first interaction as the FADA President, Gulati said: "September sales might not be as good as that of last month or as the upcoming months, considering half the month (September) will be an inauspicious time to buy new things," he told IANS.

"Therefore, customers will plan to delay their purchase and these delayed purchase will reflect in October sales when the country enters into the festive season in northern India (Navratra and Diwali)."

He predicted that August and September wholesale or dispatches might witness better growth figures considering every dealer is preparing for the festive season, and working on their respective inventory build-up, which is a norm al & regular practice by dealers," he said.

"There are several OEM's who were until recently facing shortage of some of their prominent models, which OEM's in association with their respective dealer partner are trying to sort in this period (August and September) before they enter the festive season."

According to Gulati, demand 'green shoots' have become visible in the last few month, since the end of 'Lockdown'.

"Demand from rural market has given a substantial boost to retail sales, and now with better monsoon we expect the market to grow further," Gulati cited.

"As far as buying sentiments are concerned, we are still not sure whether it's a ripple effect of the new normal where customer is preferring personal mode of transportation, which might get settled in times to come or even the festive push."

Besides, he urged the Centre to immediately focus on policies such as @Reduction in GST rates, attractive incentives on long pending scrappage policy, a clear vision and policy on regulatory and emission norms" amongst others.

"The government on the other hand must take all necessary steps to bring back the assurance among every member of the automobile ecosystem such as OEM's, Component Manufacturers, Dealers, Tyre Manufacture rs' and also in demand restoration, which in turn will add up to the customer sentiments and confidence," he added.

As per FADA, nearly 90 per cent of all dealerships are operational across the country now.

The association represents over 15,000 automobile dealers having 25,000 dealerships, accounting for 90 per cent of automobile sales and service in India .

Its members employ over 40 lakh employees in the country at dealerships and service centres with 25 lakh direct employees and another 15 lakh indirect depends..