India's overall vehicle registrations declined by 54.79% on a sequential basis in May 2021, due to the second wave of the COVID-19 pandemic, according to data released by the Federation of Automobile Dealers Associations (FADA). Similarly, the data released by them showed a decline of 70.69% during the month under review from the level of May 2019. Accordingly, vehicle registration stood at 5,35,855 units in May 2021, compared to 18,22,566 units reported for the corresponding period of 2019 and 11,85,374 units in April 2021.
Segment-wise, registration of personal vehicles declined by 63.70% on a sequential basis and 58.96% from May 2019 levels to 85,733 units. Similarly, two-wheeler registration fell by 52.52% on a sequential basis and 71.08% from May 2019 levels to 4,10,757 units. Notably, tractor retail sales declined. The segment's off-take fell by 57.85% on a sequential basis and 56.60% from May 2019 levels to 16,616 units.
"The second wave of COVID-19 has left the entire country devastated as there may not be a single household which did not get affected. Apart from urban markets, this time, even rural areas were badly hit. May saw continued lockdown in most of the states," said FADA President Vinkesh Gulati. "Not surprisingly, auto retail for the month witnessed bloodbath as sales fell by (-) 55% on a MoM basis. Similarly, all categories of vehicles fell by a huge degree….,” he added.
The FADA President said that the auto retail industry is in dire need of support. “While a handful of original equipment manufacturers (Tata Motors – CV, Renault, Bharat Benz and HMSI) have announced financial help to their channel partners, others are yet to do so. Hence, FADA requests all those OEMs which have still not announced any financial assistance to do it urgently.”
FADA has also appealed to the Prime Minister that instead of restructuring, banks should allow a moratorium of 90 days to all categories of dealers without keeping a turnover limit.
On the outlook for the automobile industry, FADA said that the first nine days of June have seen better than expected retails due to pent up demand and if the trend continues, almost similar sales could be witnessed when compared to June last year. "The monsoons arrived in India almost on time. If Met predictions are to be believed, normal and evenly spread rains may bring an early respite for the rural economy thus pushing demand for vehicles faster than expected.”
It may be prudent to say that India may not witness a V-shaped recovery unlike last time, said FADA, adding that it continues to remain guarded in its optimism on overall industry recovery for fiscal FY21-22.