Vehicle registration across segments drops 2.7% YoY in November: FADA

It has been reported that The Vehicle registration across all the automobile segments dropped year-on-year by 2.7 percent to 1,817,600 units in November, the Federation of Automobile Dealers Association (FADA) said on Wednesday. When compared with 2019, the overall registration during the month dropped almost 20 percent, the apex body said.

Even Diwali, the festival of lights which typically is a critical month for auto companies in volume terms as it is associated with purchase of big ticket items, couldn’t boost sales. While supply-side issues plagued carmakers, two-wheeler makers struggled to revive demand.

Two-wheeler registrations dropped 0.75 percent YoY in November on an already low base of 1,444,763 units last year, passenger vehicles sales fell 19.44 percent to 240,234 units. The drop was a steep 20.29 percent and 14.02 percent respectively for two-wheelers and PVs, from the November 2019 numbers, the company said.

Rural India

Passenger vehicle dispatches to dealers during the month declined 14 percent to 286,000 units from 246,000 units a year ago, reveal industry estimates. PV sales rose 12.73 per cent in November 2020 to 285,367 units year-on-year.

“Auto retail for the month of November remained in negative zone despite Diwali as well as marriage season in the same month. The unwanted rains in southern states further spoiled the party,” said Vinkesh Gulati, president, FADA.

According to Gulati, unless rural India starts showing signs of strength overall retails will continue to remain weak. While the two-wheeler segment saw almost at par sales compared to last year (which itself was a bad year), overall sentiment remained low as marriage season also didn’t help in revival except in one or two states, the company said.

Apart from this, crop loss due to incessant rains and flood in southern states, high acquisition prices as well as fuel costs kept the customers away. “Further, there are no signs of an increase in inquiry levels which is a bigger cause of concern.”

Economic Activity

The apex body is hopeful that the chip shortage will ease in times to come and therefore, reduce waiting period of vehicles and help in increasing sales.

It has requested the two-wheeler makers to announce an attractive scheme which can work as a stimulus for growth in sales and to consistently work on a 21-day inventory cycle, the company said.

Meanwhile, though on a low base, the commercial vehicle and three-wheeler segments advanced YoY at a brisk pace by 13.32 percent and 66.85 percent respectively. A pick up in the economic activity and improved viability of the transporters also helped CV sales. With diesel prices at record highs, supply of CNG vehicles remained constrained due to its high demand. (business-standard)