Vehicle Registrations for August shows improvement due to ongoing festivities when compared MoM but still down by -26.81% on YoY basis.
• On yearly comparison, 2-Wheeler degrows by -28.71%, 3-Wheeler by -69.51%, CV by -57.39%, and PV by -7.12%. Tractor registration continued its upwards journey with 27.80% growth.
• Entry Level Passenger Vehicles shows initial signs of demand revival as customers sitting on fence finally 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 the Government’s reduction on GST for 2 wheelers and roll out of incentive-based Scrappage Policy thus re-igniting demand and once again making Auto
a lead indicator of growth.
The Federation of Automobile Dealers Associations (FADA) released the Monthly Vehicle Registration Data for the Month of August’20. August’20 Retail Sales Commenting on how August’20 performed, FADA President, . Vinkesh Gulati said, “With the start of Festival Season and the Government’s continued effort to open up India, the month of August saw good numbers when compared to immediate previous months. August also saw an arrest in decline and pullback efforts on all fronts were visible, though on YoY, all categories except Tractors continued
to fall, though at a slower pace. Passenger Vehicles after 5 months saw decline reducing to single digit. Customers who were sitting on the fence, finally concluded their purchase during ongoing festivals of Janmashtami and Ganesh
Chaturthi. Entry level Passenger Vehicles were in high demand as personal mobility is being preferred
with current pandemic showing no signs of reduction. Apart from Rural Market which was showing revival signs until now, Urban Centres for the first time showed initial signs of demand pullback. With the Government’s priority in spending towards rural development and agriculture, coupled with good monsoon and a healthy sowing season, Tractor, Small Commercial Vehicles and entry level Passenger Vehicles positively impacted August Sales.
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 issues. A stricter CIBIL score is also affecting customer finance.
FADA once again requests the Government to announce demand boosting stimulus and awaits the announcement of reduction in GST for 2-wheelers. We also await the much required incentive based scrappage policy. Both these measures will act as demand drivers for 2-wheelers and specially Medium & Heavy Commercial Vehicles sales in India thus once again making Auto Industry, a lead indicator for India’s growth.”
