Close on the heels of a surprisingly weak gross domestic product (GDP) growth reading, automobile sales data, seen as a an important indicator of economic activity in India, has spelt another round of disappointment.
Retail sales of passenger vehicles in November fell 14% from a year earlier, according to data issued by the Federation of Automobile Dealers Associations on Monday.
The bump-up that countless weddings last month were expected to provide doesn’t seem to have materialized.
This has accentuated concerns over flagging demand even for relatively expensive consumer durables, with weaknesses in lower ticket-price categories a longer-running story.
Automobile dealer inventories had risen to as high as 80 days recently. Though it is now down to about 65 days, there’s still much stock left to offload.
This implies that discounts to lure buyers will likely continue. December anyway sees an increase in price-offs and special gifts as buyers tend to defer year-end purchases to the new year.
With input costs rising, several manufacturers have said they will raise prices in January. With sales already in the slow lane, that might dampen prospects of a new-year revival.
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