Cars, SUV buck retail auto sales drop

Retail sales of passenger vehicles maintained growth with sales of over 2.79 lakh units in March, data released by the Federation of Automobile Dealers Association (FADA) showed. The figure was not strictly comparable with the year-earlier period, when sales were halted by nationwide COVID-19 lockdowns.

Despite lower base, total vehicle sales declined by 28.6% to around 16.49 lakh units. Two-wheeler sales increased by more than one-third to around 11.95 lakh units, while three-wheeler supplies increased to 38,034 units. Retail sales of commercial vehicles stood at 67,372 units in March, up from 42% contracted a year earlier.

However, tractor sales grew 29.2% to 69,082 units.

‘extreme caution’

FADA said it was maintaining ‘extreme caution’ for April amid a second wave of epidemics, potential lockdowns and lack of semiconductors and ABS (anti-lock braking system).

“Tractor and passenger vehicles (PV) were the only two categories that saw healthy digit growth,” said FADA President Winkle Gulati. “This increase may be linked to several factors such as last year’s low base, transition from BS-4 to BS-6 and India going under total lockdown,” he said.

He said that the global shortage of wafers for semiconductor inputs had extended the PV waiting period to seven months.

Citing Pew Research, he said that the financial crisis brought on by COVID-19 had left almost 32 million Indians out of the middle class. This badly affected the two-wheeler segment, which saw its biggest decline in the last few months. “It works as a double damper in tandem with high fuel prices and price increases,” Mr. Gulati said. “This has not only caused havoc in the minds of entry-level customers, but has also kept them away from going to showrooms,” he said.

FADA stated that April was generally a high selling period due to festivals such as Ugadi, Gudi Padwa, Baisakhi and Poila Boishakh besides the wedding season. Any lockdown at this point would severely hamper the momentum achieved by the auto industry, it warned.

The industry group said, “The growth of COVID-19 and fear among consumers has started keeping them away from high ticket purchases.” It states that due to lack of semiconductor it is not only P.V.

The Udyog Mandal said that since Maharashtra contributed 10–11% of auto retail, the current lockdown would have a ‘catastrophic effect’ on sales this month.

“FADA maintains extreme caution for the month of April as COVID-19 rises to new highs,” it said.