Instilling confidence into the lockdown-battered industry, many auto OEMs have registered improved sales vis-à-vis the past few months, with passenger vehicles (PVs) clocking sales of 1, 82,779 units in July 2020, compared to 1, 90,115 units in July 2019, limiting the de-growth to 3.86%. Two-wheeler sales were at 12, 81,354 units, against 15, 11,717 units registering a decline of 15.24% while three-wheeler sales stood at 12,728 units in July 2020 compared to 55,719 units in July 2019 marking a 77.16% decrease, according to Society of Indian Automobile Manufacturers (SIAM) data released on Tuesday. Rajesh Menon, director general, SIAM, said: “The month of July was significantly better than the preceding months and it instilled some confidence into the industry. Many OEMs have registered improved sales vis-à-vis the past few months, and this brings back a sentiment of resolve to the sector.”
SIAM data comes on the heels of the Federation of Automobile Dealers Associations (FADA) statistics on Monday that showed that vehicle registration for July 2020 declined by 36% as India continues to fight with Covid-19. The two-wheeler (2W) degrew by 37.47%, three-wheeler (3W) by 74.33%, commercial vehicle by 72.18%, and passenger vehicle by 25.19%. Despite abundant liquidity, risk averse mood of banks and NBFC’s, affecting demand in CV, 3W and 2W categories, FADA had pointed out.
Commenting on the data, Rajan Wadhera, president, SIAM, said: “After a few consecutive months of plummeted sales in a post-Covid scenario, there are signs of green shoots in passenger vehicles and two-wheelers, where the year-on-year de-growth is much lesser than the previous months. The sales numbers in the month of August would indicate, if this is a sustainable demand and not just a pent-up demand.”
The total production of passenger vehicles, two-wheelers, three-wheelers and quadricycle in July 2020 was at 17,15,514 units, against 2,428,518 units in July 2019, with a de-growth of 29.36%. Sequentially, in June 2020, the PV sales were at 1, 05,617 units as compared to 2,09,522 units in June 2019 marking a decrease by 49.59%. Two-wheeler sales were at 10, 13,431 units in June 2020, compared to 1,649,475 units in June 2019 showing a decrease by 38.56%. Three-wheelers notched up sales of 10,300 units in June 2020, against 51,885 units in June 2019 recording a decrease of 80.15%.
During April-July this year, PV sales were at 3, 36,513 units as compared to 902,799 units in April-July 2019, down by 62.73%. Two-wheeler sales were at 25, 74,467 units in April-July 2020, compared to 65,24,784 units in April-July 2019, down by 60.54%. Three-wheeler sales stood at 25,488 units in April-July 2020, against 2, 05,516 units in April-July 2019, down by 87.60%. Revealing the registration trend, FADA president Ashish Harsharaj Kale had said, “As India continues to open up, the month of July saw better registrations compared to June, though on a y-o-y basis auto sector recovery is yet to be seen anywhere near normal. Current market conditions are still not indicative of the actual demand situation on an all-India level and retails continue to de-grow in huge double digit despite the low base of last year.”
FADA said with a caveat of no further lockdowns, especially in auto manufacturing hubs, the outlook for August is positive in comparison to July. August brings with itself the beginning of a long festival season. With Onam and Ganesh Chaturthi in next few days, FADA hopes that auto industry will start its recovery journey in a linear manner. Extreme caution was required by OEM’s towards wholesale billing being in tune with retail sales to avoid dealer inventory build-up. With retail sales still at 60-70% levels y-o-y despite the low base of last year, dealers are battling on many fronts to navigate through this unprecedented crisis and disproportionate inventory. The excessive interest cost could further put many on the border of business survival, it said.
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