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Automotive registrations have decreased by a substantial margin for the month of March this year. According to the (FADA) Federation of Automobile Dealers Association, automotive registrations have fallen by over 28 per cent in the previous month.
Comparing the previous month registration number to March 2020, the number has decreased by 28.64 per cent on a (YoY) Year-on-Year basis. This includes Tractors, (PVs)Passenger Vehicles, (2Ws)Two-Wheelers, (3Ws) Three-Wheeler and (CVs) Commercial Vehicle sales.
However, comparing the same number to February 2021, the registrations have grown by 10.05 per cent posting a (MoM) Month-on-Month growth. This shows the automotive sector recovering from the sales slowdown during the year 2020.
Delving in detail, we can see that the Tractors and Passenger Vehicles has maintained its YoY growth of 29.21 per cent and 28.39 per cent in the last month, respectively.
Other sectors such as the 2W, 3W and CV segments are yet to recover to their fullest potential as compared to last year. These sectors are behind by 35.26%, 50.72% and 42.20% registrations in the previous month when compared to March 2020, respectively.
Getting into the MoM analysis between February 2021 and March 2021, the registrations have increased across sectors. On MoM basis 2W, 3W, CV, PV and Tractor grew by 9.54%, 14.15%, 14,15%, 10,11% and 12.60%, respectively.
The report from FADA also stated that over 47 per cent of dealers in the passenger vehicle segment lost more than 20 per cent of customers due to the waiting period. Due to the continued shortage of semi-conductors, the waiting periods in the automotive sector continue to increase in the country.
The association also feels that the second wave of Covid-19 virus that is spreading in the country could affect the auto sector again. Any lockdown issued by the government in future will severely affect the ongoing sales growth in the Auto Industry.
Commenting on how March'21 performed, FADA President, Mr Vinkesh Gulati said, "According to FADA Survey, 47% of PV dealers said that they lost more than 20% of sales due to supply-side constraints. Tractors continued its dream run as rural incomes saw improvements after successive monsoons and good rabi produce. If experts are to be believed, India will witness a normal monsoon for the 3rd year in a row. This will further see tractors performing well in FY 21-22."
"According to Pew Research, financial woes brought by Covid-19 have pushed about 32 million Indians out of the middle class, undoing years of economic gains. This had its impact on 2-wheelers as it saw one of its steepest de-growth in the last few months. This coupled with high fuel prices and price increase acted as a double whammy. It not only created havoc in entry-level customers mind but also kept them away from visiting showrooms."
"The 3-wheeler marketing is witnessing a tactical shift from ICE to EV's. While prices of vehicles are increasing due to BS-6 and metals prices, customers coming from the lower-income category are not able to re-pay EMI's due to poor income. This coupled with social distancing norms and educational institutions still closed are keeping riders away."
"Commercial vehicles continued to degrow on a YoY basis. High BS-6 prices, low finance availability, repayment pressure due to the moratorium period getting over, were the few reasons for nonperformance. The category showed growth in some markets/subcategories where Government Infrastructure spending has begun. Bus segment continued to suffer due to ongoing Pandemic," he concluded.
Thoughts About The Automotive Registrations Decreasing In March 2021
The Auto Industry is still on its path to recover from the massive auto slowdown in the year 2020. Although there is substantial growth every month, the rising situation of the second wave Covid-19 pandemic can disrupt the pace once again. Adding to the woes is the ongoing short supply of semiconductor.