FADA asks 2-wheeler manufacturers to curb production as inventory piles up with dealers
FADA asks 2-wheeler manufacturers to curb production as inventory piles up with dealers

Automobile dealers' body FADA on Thursday said passenger vehicle (PV) retail sales in March witnessed a year-on-year growth of 28.39 per cent to 2,79,745 units, as compared to the year-ago period which saw disruptions in the market due to COVID-19 led lockdown.

According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,277 out of the 1,482 regional transport offices (RTOs), PV sales stood at 2,17,879 units in March 2020.

Two-wheeler sales, however, declined 35.26 per cent to 11,95,445 units last month, as compared to 18,46,613 units in March 2020.

Commercial vehicle sales also declined 42.2 per cent to 67,372 units, as against 1,16,559 units a year ago.

Similarly, three-wheeler sales declined 50.72 per cent to 38,034 units last month, from 77,173 units in the year-ago period.

Tractor sales, however, grew by 29.21 per cent to 69,082 units last month, against 53,463 units in the same month last year.

Total registrations across categories declined by 28.64 per cent to 16,49,678 units last month compared to 23,11,687 units in the year-ago period.

FADA President Vinkesh Gulati said automobile registrations fell by double digits last month as compared with March last year which had witnessed seven days of lockdown due to the coronavirus pandemic.

"According to Pew Research, financial woes brought by COVID-19 have pushed about 32 million Indians out of the middle class, undoing years of economic gains. This had its impact on two-wheelers as it saw one of its steepest de-growth in the last few months," he noted.

This coupled with high fuel prices and price increase acted as double whammy, Gulati said.

"It not only created havoc in entry level customers' minds but also kept them away from visiting showrooms," he added.

Gulati noted that sales growth in PVs and tractors could be associated with multiple factors like low base of last year due to transition from BS-IV to BS-VI.

"According to a FADA survey, 47 per cent PV dealers said that they lost more than 20 per cent sales due to supply side constraints," he said.

Commenting on dip in commercial vehicle sales, Gulati said high BS-VI prices, low finance availability, repayment pressure due to moratorium period getting over, were the few reasons for sales decline in the segment.

On sales outlook, he noted: "April comes with festivities like Ugadi, Gudi Padwa, Baisakhi and Poila Boishakh. This coupled with marriage season is generally a high sales period. At this juncture, the second wave of COVID-19 is not only spreading faster but is also trying to destabilise the growth which India has been able to achieve in the last few months." Any lockdown at this point would severely hamper the momentum which is getting built for the auto industry, Gulati said.

Increase in COVID-19 cases has started to impact sales, he added.

"The effects of the same can be seen in the two-wheeler category where inquiry levels are low. This coupled with semiconductor shortage will continue to hamper passenger vehicles but also two wheelers due to ABS shortage," Gulati said.

Two-wheeler sales, however, declined 35.26 per cent to 11,95,445 units last month, as compared to 18,46,613 units in March 2020.

Commercial vehicle sales also declined 42.2 per cent to 67,372 units, as against 1,16,559 units a year ago.

Similarly, three-wheeler sales declined 50.72 per cent to 38,034 units last month, from 77,173 units in the year-ago period.

Tractor sales, however, grew by 29.21 per cent to 69,082 units last month, against 53,463 units in the same month last year.

Total registrations across categories declined by 28.64 per cent to 16,49,678 units last month compared to 23,11,687 units in the year-ago period.

FADA President Vinkesh Gulati said automobile registrations fell by double digits last month as compared with March last year which had witnessed seven days of lockdown due to the coronavirus pandemic.

"According to Pew Research, financial woes brought by COVID-19 have pushed about 32 million Indians out of the middle class, undoing years of economic gains. This had its impact on two-wheelers as it saw one of its steepest de-growth in the last few months," he noted.

This coupled with high fuel prices and price increase acted as double whammy, Gulati said.

"It not only created havoc in entry level customers' minds but also kept them away from visiting showrooms," he added.

Gulati noted that sales growth in PVs and tractors could be associated with multiple factors like low base of last year due to transition from BS-IV to BS-VI.

"According to a FADA survey, 47 per cent PV dealers said that they lost more than 20 per cent sales due to supply side constraints," he said.

Commenting on dip in commercial vehicle sales, Gulati said high BS-VI prices, low finance availability, repayment pressure due to moratorium period getting over, were the few reasons for sales decline in the segment.

On sales outlook, he noted: "April comes with festivities like Ugadi, Gudi Padwa, Baisakhi and Poila Boishakh. This coupled with marriage season is generally a high sales period. At this juncture, the second wave of COVID-19 is not only spreading faster but is also trying to destabilise the growth which India has been able to achieve in the last few months." Any lockdown at this point would severely hamper the momentum which is getting built for the auto industry, Gulati said.

Increase in COVID-19 cases has started to impact sales, he added.

"The effects of the same can be seen in the two-wheeler category where inquiry levels are low. This coupled with semiconductor shortage will continue to hamper passenger vehicles but also two wheelers due to ABS shortage," Gulati said.

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