Two-wheeler registrations were down by 28.71 per cent, three-wheeler by -69.51 per cent, CV by -57.39 per cent and PV by -7.12 per cent. On the other hand, tractor registrations continued its positive momentum and registered 27.80 per cent growth.
Auto vehicle registration in the month of August continued its march down south as retail slipped 26.81 per cent, according to data provided by Federation Of Automobile Dealers Associations (FADA). On a brighter side, registrations were up 3.8 per cent in comparison to July 2020. Vehicle Registrations for August showed improvement due to ongoing festivities.
Two-wheeler registrations were down by 28.71 per cent, three-wheeler by -69.51 per cent, CV by -57.39 per cent and PV by -7.12 per cent. On the other hand, tractor registrations continued its positive momentum and registered 27.80 per cent growth in August.
Entry Level Passenger Vehicles shows initial signs of demand revival as customers conclude their purchase with Janmashtami and Ganesh Chaturthi during the month. Overall demand still not back to pre-COVID levels as despite abundant liquidity, risk averse mood of Banks and NBFC’s coupled with stricter CIBIL scores, fails to capture demand in the current month.
FADA awaits reduction on GST for two-wheelers and roll out of incentive based the Scrappage Policy thus re-igniting demand.
Vinkesh Gulati, President, FADA said, "Passenger Vehicles after 5 months saw decline reducing to single digit. Apart from Rural Market which was showing revival signs until now, Urban Centres for the first time showed initial signs of demand pullback. Tractor, Small Commercial Vehicles and entry level Passenger Vehicles positively impacted August Sale.
He further said that Overall demand is still not back to Pre-covid levels as Banks and NBFCs continue to have a cautious approach towards funding. Commercial Vehicles, especially M&HCV category is still suffering from higher lead times with financers and an increase in cost of acquisition leading to viability issue.A stricter CIBIL score is also affecting customer finance.
As far as near term outlook, FADA stated that September brings the inauspicious 16 days Shraadh period coupled with 30 days of Adhik Maas when no high value transactions take place. If NPA’s are not too high and recovery rate is even neutral to positive, Banks and NBFC’s may return with aggressive financing schemes for Auto Loans thus leading to a strong demand pullback.
On the supply front, OEM’s are dispatching vehicles to Dealers with a purpose of stocking-up inventory for the upcoming festival season, but retail sales are still at 70-75 percent levels despite the low base of last year.
FADA advises extreme caution to all OEMs and our Dealer fraternity to avoid excessive Inventory build-up thus leading to unmanageable interest cost which could further result in dealership closures.
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