Vehicle sale in May skid sharply on MoM basis

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Vehicle sale in May skid sharply on MoM basis

 

 

Total vehicle retails for the month of May fell by -54.79 per cent month-on-month (MoM) to 5,35,855 units, compared to 11,85,374 units in April.

Sales in all categories tumbled sharply on MoM basis. Two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), and tractors and commercial vehicles (CV) fell by -53 per cent, -76 per cent, -59 per cent, -57 per cent and -66 per cent respectively, said the Federation of Automobile Dealers Association (FADA) on Thursday.

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“The first nine days of June saw a better start than expected due to pent up demand. At this pace June may result in almost equivalent sales when compared to June last year,” FADA said in a statement.

In the PV segment, retail sales declined to 85,733 units during the month, compared to 2,08,883 units in April.

In the 2W segment, retail sales declined to 4,10,757 units during the month, against 8,65,134 units. Similarly, in the 3W segment, sales declined to only 5,215 units in May, compared to 21,636 units in April.

CV sales too declined to 17,534 units from 51,436 units in April and tractor sales fell to 16,616 units in May, compared to 38,285 units in April.

“The second wave of Covid has left the entire country devastated as there may not be a single household which did not get affected. Apart from urban markets, this time, even rural areas were badly hit. May saw continued lockdown in most of the States,” Vinkesh Gulati, President, FADA, said.

He said the auto retail fraternity is in dire need of support. While a handful of original equipment manufacturers (Tata Motors – CV, Renault, Bharat Benz and HMSI) have announced financial help to their channel partners, others are yet to do so.

“Hence, FADA humbly requests all those OEMs which have still not announced any financial assistance to kindly do it urgently. FADA also appeals to the Prime Minister that instead of restructuring, banks should allow a moratorium of 90 days to all categories of dealers without keeping a turnover limit. This is required as auto retail trade works on the principle where dealers get funded from financial institutions in terms of inventory funding for a period of 30-45 days to purchase vehicles from auto manufacturers,” Gulati said.

Also read: Lockdown effect: In a month, auto registrations skid 28% in April

In the near-term outlook, he said, that the monsoons arrived in India almost on time and if the MET predictions are to be believed, normal and evenly-spread rains may bring an early respite to the rural economy, thus pushing demand for vehicles faster than expected, he said.

“It may be prudent to say that India may not witness a V–shaped recovery unlike last time. FADA hence, continues to remain guarded in its optimism on overall industry recovery for the fiscal year 2021-22,” he added.

Vehicle sale in May skid sharply on MoM basis

 

 

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