The Federation of Automobile Dealers Associations said on Monday that vehicle registrations in July were down 36%. On a year-on-year basis, FAFA said that the two-wheeler registration had reduced by 37.47%, three-wheelers by 74.33%, commercial vehicles by 72.18% and personal vehicles by 25.19%.
FADA collected vehicle registration data from 1,235 out of the 1,445 regional transport offices (RTOs), and personal vehicle sales stood at 2,10,377 units in July 2019, and was at 1,57,373 in July 2020.
Two-wheeler sales declined 37.47% to 8,74,638 units last month as compared to 13,98,702 units in July 2019.
Commercial vehicle sales slumped 72.18% to 19,293 units as opposed to 69,338 units in July 2019.
FADA said that banks and finance institutions are risk averse, which is also affecting demand.
FADA President Ashish Harsharaj Kale said that that July saw better registrations compared to June (as evidenced by company data as well), but on a YoY basis, “auto sector recovery is yet to be seen anywhere near normal.”
“Current market conditions are still not indicative of the actual demand situation on an all India level and retails continue to de-grow in huge double digit despite the low base of last year,” he said.
As mentioned by automobile companies, FADA said that the rural markets showed strong growth on the back of a good monsoon.
“Banks and NBFCs though flush with high liquidity are still having a cautious approach towards funding auto retail affecting the Demand revival especially in segments of CV, 3W and 2W. Vehicle funding percentage has fallen by 10-15% in many segments increasing the initial contribution beyond reach of many customers, despite having the intent to buy,” Ashish said.
FADA demanded that demand boosting policies be announced by the government, and announce an incentive-based scrappage policy.
In its outlook for August, FADA said it’s positive in comparison to July, especially being the beginning of the festive season, starting with Onam and Ganesh Chaturti.
FADA said that original equipment manufacturers (OEMs) must ensure that their wholesale billing is in tune with retail sales, and there is no dealer inventory build up.
“With retail sales still at 60-70% levels YoY despite the low base of last year, dealers are battling on many fronts to navigate through this unprecedented crisis and disproportionate inventory. The excessive interest cost could further put many on the border of business survival,” Ashish said.
For the year, he said that the outlook continues to be negative, with degrowth expected to be 15-35% in retail sales of all sectors except tractors, which is expected to be positive.
FADA also provided OEM data, which showed that for domestic passenger vehicle retail sales, Maruti Suzuki continued to lead the segment with a market share of 50.4%. Hyundai comes a distant second with 18.69%, followed by Tata Motors 8.1 %, Mahindra & Mahindra 4.96%, Kia Motors 4.45%, Renault 3.18%, Toyota Kirloskar Motor 2.79% and Honda 2.1%.
In the two wheeler segment, Hero MotoCorp led, and in July had a market share of 40.66%. This was followed by Honda Motorcycle and Scooter India at 23.03% and TVS Motor Company 14.19%.