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Automobile retail sales crash 55% in May but strong demand recovery in June so far

Total vehicle retails (including tractors) in May fell to 535,855 units from 1.18 million units in April

June 10, 2021 / 12:10 PM IST
 
 
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Automobile retail sales crashed 55 percent in May compared to April as the COVID-19 lockdowns imposed across several states crippled vehicle offtake.

Total vehicle retails (including tractors) during May fell to 535,855 units from 1.18 million units sold in April, as per data shared by the Federation of Automobile Dealer Association (FADA) said.

Since India was under a complete lockdown in May 2020, no year-on-year comparison was provided by FADA, which sources retail sales data from 86 percent of India’s regional transport offices (RTO).

Sales of two-wheelers, the biggest contributor to the sales pie, dropped nearly 53 percent to 410,757 units, but the drop in passenger vehicles was steeper at 59 percent with sales at just 85,733 units.

Commercial vehicles remained one of the two worst-hit segments with volumes declining 66 percent to 17,534 units whereas three-wheeler volumes crashed 76 percent to 5,215 units during May.

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Vinkesh Gulati, President of FADA said, “Apart from urban markets, this time, even rural areas were badly hit. May saw continued lockdown in most of the states.”

Several companies including Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Renault, Nissan, Hyundai, Royal Enfield, MG Motor, Hero MotoCorp had shut their factories to either cut back on production or due to labour unrest during May.

The average inventory for passenger vehicles (cars, SUVs and vans) stood at 20-25 days while for two-wheelers it stood at 25-30 days during May.

But the first nine days of June have seen better than expected retails due to pent up demand, said FADA. “If the trend continues, we may see almost similar sales when compared to June 2020,” FADA added.

June has seen some states such as Maharashtra and Gujarat start the process of a gradual unlocking allowing sales of non-essential items including automobiles. With new per day COVID-19 cases now falling below 100,000 automobile companies are hoping for a rebound in sales this month.

“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,” FADA said.
Moneycontrol News
first published: Jun 10, 2021 11:56 am

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