In the Vehicle Retail Data revealed today by the Federation of Automobile Dealers Associations (FADA) for June 2021, the association highlights that the registration numbers have improved compared to the same period last year. However, it goes on to state that the numbers are still considerably lower than monthly sales data from the pre-COVID era. The positive momentum from June is expected to carry forward through July. With southern India opening up, a further pickup is expected in demand. FADA clarifies that in the longer term, Auto Industry is yet to see retail numbers comparable to FY 19.
The month of June witnessed re-opening for most of the states except the ones in the South. Due to this, the industry witnessed a high pent-up demand which was stuck in the system because of statewide lockdowns, FADA President, Vinkesh Gulati said.
While all the categories were in the green, Passenger Vehicles maintains to see good demand as customers continued to show keenness in vehicles for observing social distancing and the safety of their families.
The two Wheeler category though in green has witnessed a softer recovery as the rural market is taking time to get back from post covid stress. The commercial vehicle segment has seen staggering growth over last year, though on a very low base as there were product shortages due to the BS-6 transition.
Overall, the industry is still not out of the woods. When compared to June’19, we are still in red by -28% with 3W and CVs taking the max hit as they are down by -70% and -45% respectively. Only Tractors continue to grow as it was up 27% compared to June’19.
Near Term Outlook
Continued global semi-conductor shortage is impacting demand-supply mismatch thus restricting the growth of Passenger Vehicles. On one hand, while the new virus mutants and a prediction of 3rd wave in August are affecting sentiments, the revival of monsoons in July after a pause of 2 weeks and a better vaccination drive rate continues to build some hope.
We will therefore have to wait and watch how the overall economy shapes up over the next couple of months. We hence see the demand to be a mixed bag and hope that recovery is back on track by the time Navratri and Diwali knock on our door, FADA president adds.
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