Covid-19 impact on automobile industry: Registrations in May plummet down 89%, zero retails in April

FADA President Ashish Harsharaj Kale has said the demand trend in first 10 days of June show an extremely weak consumer sentiment.

Automobile registrations plummeted by 88.87 per cent in May as the country grappled with coronavirus pandemic and shutdown of most businesses, the Federation of Automobile Dealers Association (FADA) said on Thursday. For the first time, said FADA President Ashish Harsharaj Kale, the month of April witnessed zero retails. While lockdown was gradually relaxed beginning May, auto dealerships and workshops opened for the first time after 40 days in many cities.

At the end of May, about 60 per cent showrooms and 80 per cent workshops out of 26,500 outlets were operational across the country. Commercial vehicles witnessed a downswing of 96.63 per cent to 2,711 registrations versus 80,392 in May 2019, data released by FADA showed.

Three-wheeler registrations were down by 96.34 per cent with 1,881 registrations in May 2020 compared to 51,430 in the year-ago period. Two-wheeler registrations totalled 1.59 lakh last month compared to 14.2 lakh in May 2019, marking a slide of 88.8 per cent.

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Passenger vehicle registrations edged lower by 86.97 per cent to 30,749 from 2.35 lakh in the year-ago period. And tractor registrations fell by 75.58 per cent to 8.317 last month compared to 34,053 in the year-ago period. That took overall vehicle registrations to 2.02 lakh in May 2020, down 88.87 per cent from 18.21 lakh in May 2019.

Kale said the demand trend in first 10 days of June shows an extremely weak consumer sentiment. “Weak consumer confidence — especially in urban areas — continues to haunt as customers stay away from concluding their purchase due to threat of community spread and the possibility of another complete lockdown persists,” he said.

Lakhs of jobs and hundreds of dealers survival is at stake if demand de-growth predictions hold true and operating economics remain unchanged, he added. FADA India represents over 15,000 automobile dealers having 25,000 dealerships including 30 associations of automobile dealers at the regional, state and city levels accounting for 90 per cent of market share.