Auto majors back retail sales numbers, SIAM to stick with wholesale

Mumbai: Indian auto companies welcomed the inaugural declaration of company retail/registration sales numbers by Federation of Automotive Dealers Association (FADA) for July as retail sales have been overtaking wholesale numbers, declared by Society of Indian Automobile Manufacturers (SIAM) over the last quarter.

For the past year and a half, dealer association FADA has been pushing SIAM to agree to release retail sales numbers.
“The ministry of road transport wanted transparency and has been insisting on relying on Vaahan data. Although the July retail (registration) figures does not include data of a few major states like MP, Telangana and AP, we still get an almost exact picture as manufacturers cannot extrapolate retail figures”, says Vinkesh Gulati , automotive dealer and VP, FADA.


Experts said retail numbers reflect the mood of the consumers while wholesale numbers amounts to companies maximising billing, building inventory and getting a better market share. In April- July, passenger vehicle retail sales have been at 4.25 lakh units versus wholesale figure of 3.51 lakh units.

"This not only shows true consumer buying sentiments, but that inventory levels are at an all-time low”, said Shashank Srivastava, ED, marketing and sales at Maruti Suzuki. “Till recently, wholesale numbers matched retail sales or were higher to retail. However, with constraints in supplies and production schedules, auto companies have been despatching lesser number of vehicles to the dealerships,’ added Srivastava.

SIAM president, Rajan Wadhera mentioned that SIAM will continue relying on wholesale numbers as Vaahan numbers are not authentic, has a lag and does not capture data from three states. He sees higher retail sales due to personal mobility and expects production to normalise over the next three months.

Veejay Nakra, chief executive of Mahindra’s auto business said there should be a mechanism and a time frame in place allowing auto companies to transition smoothly to retail sales. “All the state RTOs must be covered by real time data on Vaahan to get an accurate picture”, he said.

In July’s registration numbers, Tata Motors has leapfrogged over Mahindra with new registrations of 12,753 units in July, against 7,811 units of Mahindra. “Our proactive shift to retail over wholesale since 2019 has sustainably eased out any stock carrying burden on dealers and we entered FY21 with near-zero stock of BS4 vehicles,” said a Tamo spokesperson. Experts maintained that Tamo was much ahead in terms of a younger fleet of products, an area where Mahindra is under pressure .

Maruti and Hyundai maintained their leadership in terms of market share, in spite of a volume decline on a year-on-year basis. Maruti’s share swelled from 47.24% to 50.40%, while Hyundai’s went up to 18.69% from 18.33% during the last year. In two-wheelers, most companies saw a drop in market share with the exception of Hero Moto Corp that saw its share rise to 40.66% compared from 35.61%.

“We also rely much more on retail numbers and track it internally. On a daily basis, we track enquiries generated, orders received and retail sales done”, says Toyota Kirloskar senior vice president (sales & service) Naveen Soni. ”Interestingly for the last quarter, wholesale was 25% lower than retail sales and this was a conscious effort to map the dealers during such unprecedented times”, Soni added.

“Wholesale and retail should ultimately match and companies should maintain a balance between the two, which is the case in July with nearly similar numbers”, says Tarun Garg, director, sales and marketing, at Hyundai Motors. “Once markets opened up, dealers were trying to liquidate inventory, thereby increasing retail sales and reducing stock."

Automakers will hope that consumer confidence remains bullish getting into the all-important festive season, experts said.