Overall Demand Recovery To Be Slow As Rural Markets Continue To Struggle With Post Covid Effects. – FADA
Total Vehicle Retails for the month of May’21 fell by -54.79% MoM and -70.69% when compared to May’19. All categories on MoM saw bloodbath as 2W, 3W, PV, Tractor and CV fell by -53%, -76%, -59%, -57% and -66% respectively.
While releasing the Monthly Vehicle Retail Data for May’21, Federation of Automobile Dealers Associations (FADA) said in a statement “we can’t represent a YoY comparison since India was under complete lockdown in May 2020. Hence, all comparisons for this month have been done with April’21 (MoM) and 2 year back with May’19.”
Total Vehicle Retails for the month of May’21 fell by -54.79% MoM and -70.69% when compared to May’19. All categories on MoM saw bloodbath as 2W, 3W, PV, Tractor and CV fell by -53%, -76%, -59%, -57% and -66% respectively. The first 9 days of June saw a better start than expected due to pent-up demand. At this pace, June’21 may result in almost equivalent sales when compared to June’20.
Commenting on how May’21 performed, FADA President, Mr. Vinkesh Gulati said, “The 2nd 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. Auto Retail fraternity is in dire need of support. While a handful of OEMs (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.”
The 1st 9 days of June have seen better than expected retails due to pent-up demand which was there in the system when states started implementing lockdown. FADA believes If the trend continues, almost similar sales might be seen when compared to June’20 last year.
A timely, normal, and evenly spread monsoon may bring an early respite for the rural economy thus pushing demand for vehicles faster than expected.
FADA continues to remain guarded in its optimism on overall industry recovery for the fiscal FY21-22, and believes that India may not witness a V-shaped recovery, unlike last time.