Retail passenger vehicle sales in the country grew 28.39% to over 2.79 lakh units in March 2021 as compared to the year-ago month which saw lower sales due to the nationwide lockdown, according to data released by the Federation of Automobile Dealers Associations (FADA).
However, despite the lower base, overall vehicle sales across segments fell 28.64% to about 16.49 lakh units, pulled down by 35.26% decline in two-wheelers sales to about 11.95 lakh units, nearly 51% decline in three-wheeler sales to 38,034 units and a 42% decline in the sales of commercial vehicles to 67,372 units. Meanwhile, tractor sales continued to grow to 69,082 units last month, up 29.21%.
The industry body added that it is maintaining “extreme caution” for April amid the second wave of COVID-19 pandemic, potential lockdowns and shortage of semiconductors and ABS (anti-lock braking system).
FADA president Vinkesh Gulati said, “Tractors and passenger vehicles [PV] were the only two categories which saw healthy double digit growth. This growth can be associated with multiple factors like low base of last year, transition from BS-IV to BS-VI and India going under total lockdown.”
He added that the global shortage of wafers, which is an input for semiconductor, kept PV waiting periods as high as seven months.
Mr. Gulati added that the financial woes brought by COVID-19 pushing about 32 million Indians out of the middle class, according to Pew Research, has badly hit the two-wheeler segment that saw one of its steepest de-growth in the last few months. “This coupled with high fuel prices and price increase acted as double whammy. It not only created a havoc in the entry level customers mind but also kept them away from visiting showrooms,” he added.
The auto dealers body said that April is generally a high sales period due to festivals like Ugadi, Gudi Padwa, Baisakhi and Poila Boishakh, along with marriage season.
It added that any lockdown at this point will severely hamper the momentum which is getting built for the auto industry. “Increase of COVID-19 and fear amongst consumers...has started keeping them away from making high ticket purchases. This coupled with semiconductor shortage will continue to hamper not only PV but also two-wheelers as ABS shortage is currently ringing alarm bells.”
FADA said that since Maharashtra contributes 10-11% of the auto retail, the current lockdown will have a “catastrophic effect” on overall sales for the month of April. “Overall, FADA maintains extreme caution for the month of April as COVID rises to newer highs,” it said.
