India's October car, motorbike sales skid as dealers caution over stock

By Aditi Shah

NEW DELHI (Reuters) - Retail car sales in India fell by 8.8% in October and motorbikes by 26.8% from a year ago, with purchasing slow to recover from the effects of the ongoing COVID-19 pandemic, data released by automobile dealers on Monday showed.

The sales numbers, based on vehicles registered in the country, were higher than September as more people visited car showrooms, but the Federation of Automobile Dealers Association (FADA) warned that momentum is slow.

New cars fared better than older models, entry-level motorcycles saw poor demand and discounts offered by automakers in October 2019 were higher - all of which affected sales this year, FADA President Vinkesh Gulati said in a statement.

Sales last year were also higher because the festive season ended in October, whereas this year it includes November, he added.

Automakers typically stock up dealerships ahead of major festivals, that begin in September and run until October or November, during which Indians make large purchases.

Companies including Maruti Suzuki, Hyundai Motor and Hero MotoCorp reported strong dealer demand in October in anticipation of high sales in the run up to the festival of Diwali this week.

The chairman of Maruti Suzuki told reporters last month that while India's leading carmaker expects strong sales between October and December, it would be hard to predict the situation from January.

FADA has asked automakers to realign their production after Diwali based on actual inventory levels so dealers are not left holding a large stock at the end of the year.

The average inventory with dealers for passenger vehicles is about 35-40 days worth of sales, while for motorbikes and scooters it is higher at 50-55 days, FADA said, which is higher than the 15 days worth of stock dealers held earlier this year.

(Reporting by Aditi Shah; Editing by Alexander Smith)