Auto registrations fall year on year by (-) 28.64pc: FADA

The Federation of Automobile Dealers Associations (FADA) has in its Monthly Vehicle Registration Data for March 2021 stated that while March automobile registrations continue to fall by (-)28.64% year on year (YoY ), it grew 10.05% month on month (MoM).

FADA stated that the tractors and passenger vehicles sustained its healthy momentum by growing 29.21% and 28.39% YoY on a low base that was a result of transition from BS-4 to BS-6 and India going under lockdown last year. On YoY basis, 2W, 3W and CV unrelentingly fell by -35.26%, -50.72% and -42.20% respectively.

On MoM basis 2W, 3W, CV, PV and tractors grew by 9.54%, 14.15%, 14,15%, 10,11% and 12.60% respectively. Passenger vehicle waiting period continued to hold its ground and remained as high as 7 months as scarcity of semiconductors continued. Around 47% PV dealers said that they lost more than 20% sales due to supply side constraints.

There was no significant change in dealer inventory days as PV & 2W inventory remained in the range of 10-15 and 30-35 days. FADA has cautioned that the second wave of Covid is not only spreading faster but is also trying to destabilise the growth which India has been able to achieve in last few months. Any lockdown at this point will severely hamper the momentum of growth in the auto industry.

Commenting on how March’21 performed, FADA President, Vinkesh Gulati said, “Auto Registrations for the month of March witnessed double digit fall to the tune of -28.64% YoY, in spite of 7 days of lockdown last year.”

Tractors continued its dream run as rural incomes saw improvements after successive monsoons and good rabi produce. If experts are to be believed, India will witness a normal monsoon for the 3rd year in a row. This will further see tractors performing well in FY 21-22.

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 2-wheelers as it saw one of its steepest de-growth in last few months. This coupled with high fuel prices and price increase acted as double whammy. It not only created a havoc in entry level customers mind but also kept them away from visiting showrooms.

The 3-wheeler marketing is witnessing a tactical shift from ICE to EV’s. While prices of vehicles are increasing due to BS-6 and metals prices, customers coming from lower income category are not able to re-pay EMI’s due to poor income. This coupled with social distancing norms and educational institutions still closed are keeping riders away.

Commercial vehicles continued to degrow on YoY basis. High BS-6 prices, low finance availability, repayment pressure due to moratorium period getting over, were the few reasons for non-performance. The category showed growth in some markets/sub categories where Government Infrastructure spending has begun. Bus segment continued to suffer due to ongoing pandemic, the FADA  president concluded.

 NEAR TERM OUTLOOK

The month of 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 is not only spreading faster but is also trying to destabilize the growth which India has been able to achieve in last few months. Any lockdown at this point will severely hamper the momentum which is getting built for Auto Industry to come out of the woods.

Increase of Covid and fear amongst consumer’s with last year’s sight in mind has started keeping them away from making high ticket purchase. The effects of the same can be seen in 2-Wheeler category where inquiry levels are low. This coupled with semiconductor shortage will continue to hamper not only passenger vehicles but also two wheelers as ABS shortage is currently ringing alarm bells.

Since Maharashtra contributes 10-11% of the auto retail, the current Lockdown will have catastrophic effect on overall sales for the month of April. Overall, FADA maintains extreme caution for the month of April as Covid rises to newer highs.

All India Vehicle Registration Data for March’21

Source: FADA Research

Disclaimer:

The above numbers do not have figures from AP, MP, LD & TS as they are not yet on Vahan 4.

Vehicle Registration Data has been collated as on 06.04.21 in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,277 out of 1,482 RTOs.

CV is subdivided in the following manner

LCV – Light Commercial Vehicle (incl. Passenger & Goods Vehicle)

MCV – Medium Commercial Vehicle (incl. Passenger & Goods Vehicle)

HCV – Heavy Commercial Vehicle (incl. Passenger & Goods Vehicle)

Others – Construction Equipment Vehicles and others