The Federation of Automobile Dealers Association (FADA) announced on Thursday, that total vehicle registrations in March were down 28.64 % year over year. Despite last year’s low base, the decline continues. Due to a seven-day lockdown in March of last year, auto sales came to a halt.
The registration numbers contrast sharply with the wholesale (distribution to dealers) numbers posted by manufacturers on April 1st. Due to the low base of last year, which resulted from a lockdown and the transition from BS-IV to BS-VI, a number of automakers, including Maruti, Hyundai, Tata Motors, Mahindra and Mahindra, announced a more than 100 % increase in March sales compared to the same month last year.
The Maharashtra lockdown, according to the dealer body, would have a “catastrophic effect” on April sales, as dealers will be unable to capitalize on the potential of festivals such as Ugadi, GudiPadwa, Baisakhi, and PoilaBoishakh. The state contributes 10%-11% of the auto retail market. As Covid rises to newer highs, FADA retains intense caution for the month of April.
It has made a representation to Uddhav Thakre, Maharashtra’s Chief Minister, to loosen the curbs and allow dealerships to operate, just like apex bodies from other industries, including hospitality, according to a FADA member. A decision is expected on Friday, according to the trade associations.
“Covid is not only spreading faster, but it is also attempting to destabilise the recent development that India has experienced. Any lockdown at this time would seriously stifle the momentum that is building for the car industry to emerge from the woods,” the dealer group said in a press release. With the exception of passenger vehicles and tractors, which saw a 28.39 % and 29.21 % increase in registrations, all other categories, including two-wheelers, commercial vehicles, and three-wheelers, saw a sharp YoY drop.
According to FADA, a global shortage of wafers, a semiconductor input, has persisted, resulting in a PV waiting period of up to seven months. According to a FADA survey, 47% of PV dealers said supply-side constraints caused them to lose more than 20% of their sales. Tractors’ dream runs continued as rural incomes improved following successive monsoons and bumper rabi harvests. For the third year in a row, experts predict that India will experience a regular monsoon. Tractors can perform well in FY21-22 as a result of this.
“Lower retail figures mean that inventory built up during the month as wholesale volume was higher. In the two-wheeler segment, there are strong signs of slowing. Supply constraints of key components are affecting PV segment volumes”, according to Mitul Shah, head of research at Reliance Securities.
In the second half of March 2021, rising Covid cases and fears of a second wave began to weigh on the auto industry, Shah said, adding that the next two months would determine how the Covid situation plays out and how it affects different sectors of the economy.Covid-19’s financial troubles have forced approximately 32 million Indians out of the middle class, reversing years of economic progress. This had an impact on two-wheelers, which experienced one of the steepest declines in recent months. According to FADA, this, combined with high fuel prices and price increases, served as a double whammy, citing a Pew Research report.
