Vehicle registrations fall 55% MoM to 5.35 lakh units in May: FADA

Mini

Total vehicle registrations in May 2021 fell 54.79 percent to 5,35,855 units as against 11,85,374 units in April 2021.

The second wave of COVID-19 and strict restrictions in most states have hit the automobile retail sales hard. The total vehicle registrations in May 2021 fell by 54.79 percent sequentially as sales in all categories including two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and tractors declined significantly.
According to the data released by Federation of Automobile Dealers Associations (FADA) on Thursday, total vehicle registrations in May 2021 fell 54.79 percent to 5,35,855 units as against 11,85,374 units in April 2021. The sales were 70.69 percent lower when compared to 18,22,566 units sold in May 2019.
Two-wheeler sales in May declined by 53 percent while those of three-wheelers plunged 76 percent, MoM. Passenger vehicle registrations declined by 59 percent and commercial vehicle registrations fell 66 percent, MoM. Tractor sales too declined 57 percent on a sequential basis.
The average inventory for passenger vehicles at the end of May 2021 ranged from 20-25 days while that of two-wheelers was 25-30 days.
“Auto Retail fraternity is in dire need of support. While a handful of OEMs (Tata Motors – CV, Renault, Bharat Benz and HMSI) have announced financial help to their channel partners, others are yet to do so. Hence, FADA humbly requests all those OEMs which have still not announced any financial assistance to kindly do it urgently,” said FADA President Vinkesh Gulati.
FADA also requested Prime Minister Narendra Modi to instruct RBI to grant moratorium for auto dealers and release guidelines for relaxation of loan re-payment equivalent to number of days of lockdown each state has been declaring.
“Since the current lockdown has already lasted well over 30-45 days and is still continuing in South India, revenue for most of the Dealers are negligible as there were minimal sales. Due to this, dealers will not be able to repay their loan tranche payment which is getting due. This will ultimately lead towards default. Since there are no guidelines, extension of tranche is considered as restructuring of loan. This will ultimately have a negative impact on Dealers' credit score as their CIBIL rating will get impacted,” Gulati said.
Meanwhile, the first nine days of June have seen better than expected retails due to pent-up demand. At this pace, June 2021 may result in almost equivalent sales when compared to June 2020.
The monsoons arrived in India almost on time. If 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, FADA added.
“It may be prudent to say that India may not witness a V–shaped recovery unlike last time. FADA hence continues to remain guarded in its optimism on overall industry recovery for the fiscal FY21-22,” the industry body said.

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