India's vehicle registrations declined by 28.64% on a year-on-year (YoY) basis in March 2021, as per data released by the Federation of Automobile Dealers Associations (FADA). However, it showed a sequential growth of 10.5% in March. FADA collected vehicle registration data from 1,277 out of the 1,482 regional transport offices (RTOs), and does not include data from Andhra Pradesh, Telangana, Madhya Pradesh and Lakshadweep.
Accordingly, vehicle registrations stood at over 16.49 lakh in March 2021, compared to over 23.11 lakh units reported for the corresponding period of last year and around 14.99 lakh in February 2021.
However, registration of passenger vehicles (PV) grew by 28.39% on a YoY basis to 2,79,745 units. Similarly, tractor registration rose 29.21% on a YoY basis in February to 69,082 units. In contrast, two-wheeler registrations fell by 35.26% to over 11.95 lakh units.
FADA President Vinkesh Gulati said auto registrations for March witnessed a double digit fall to the tune of -28.64% YoY in spite of 7 days of lockdown last year.
â€śTractors and Passenger Vehicles were the only 2 categories which saw healthy double digit growth. This growth can be associated with multiple factors like low base of last year, transition from BS-4 to BS-6 and India going under total lockdown,â€ť said FADA President Vinkesh Gulati.
Citing Pew Research, the report said that financial woes brought on by the pandemic have pushed about 32 million Indians out of the middle class, undoing years of economic gains. This had its impact on 2-wheelers as it saw one of its steepest de-growth in the last few months, with high fuel prices and price increase acting as a double whammy, the report added. "It not only created havoc in entry level customersâ€™ minds but also kept them away from visiting showrooms," he added.
FADA said the month of April comes with festivities like Ugadi, Gudi Padwa, Baisakhi and Poila Boishakh, and this coupled with marriage season is generally a high sales period. However, the second wave of COVID-19 is spreading rapidly and any lockdown at this point will severely hamper the momentum that is being generated in the auto industry, it added.
â€śSince Maharashtra contributes 10-11% of the auto retail, the current lockdown will have a catastrophic effect on overall sales for the month of April,â€ť FADA said, adding that it maintains extreme caution for April as COVID cases rise.
The FADA president also spoke about supply side constraints, stating that the global shortage of semiconductors continues to linger, and has kept the waiting period for passenger vehicles as high as seven months.
â€śAccording to FADA Survey, 47% PV dealers said that they lost more than 20% sales due to supply side constraints,â€ť Gulati said.
Talking about near term outlook, apart from COVID-19, FADA said that the semiconductor shortage will continue to hamper not only passenger vehicles but also two-wheelers as ABS shortage (Anti-lock Braking System) is currently cause for alarm.