According to a report by Motilal Oswal Financial Services, the April 2021 month-on-month sales of two-wheelers may fall 17%, those of passenger vehicles 7%, commercial vehicles 23% (LCVs and M&HCVs by 19.5% and 26%, respectively), three-wheelers 13% and tractors 8%. Regional lockdowns (in nine states) and uncertainties due to the second wave of Covid-19 have led to a slowdown in the demand momentum in April 2021, the report noted. “PVs are better off on the back of a strong order book. Supply-chain constraints are leading to lower inventories for PVs and tractors, leaving scope to replenish inventory in the coming months,” it added. As far as two-wheelers are concerned, the report noted that the demand has been slowing, with inventory of 30-60 days at the dealers’ end, especially since the marriage season and the mini-festive season were impacted due to Covid-19, resulting in inquiries declining by about 50%.
In PVs, new bookings declined by 30-50%, while cancellations were about 10%. “Levels for PVs are below normal (less than 20 days), with a waiting period of 6-8 weeks in fast selling models. The waiting period has increased due to supply chain constraints at the OEM level. Dealers are holding 10-20 days of inventory,” it noted. As most CV dealerships are on highways, they are least impacted by the lockdown. However, disruption on the human resource front and supporting activities like staff, labour movement, finance representatives, etc, impacted 30-40% of retails month-on-month. LCV and SCV demand has also slowed due to restrictions on sale of non-essential goods by e-commerce players in certain regions. Also, the demand for tractors remains strong due to a bountiful Rabi harvest and ahead of Kharif sowing, supported by an expected normal monsoon, the report added.
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