Automotive retail sales in India down 89 percent in May 2020

• Two-wheelers registered a drop of roughly 89 percent

• Passenger vehicles saw an 87 percent decline 

• June 2020 has witnessed meek sales so far

The Federation of Automobile Dealers Associations (FADA) today released the monthly vehicle registration data for May 2020. The month saw gradual relaxation and opening of dealerships after the country witnessed a lockdown for over 40 days, translating to around 2,02,697 vehicles sold across segments in the country, a year-on-year (YoY) decline of 88.87 percent.

The two-wheeler segment contributed 1,59,039 units to the total retail figure, which is a sharp 88.8 percent drop compared to May 2019. Passenger vehicles (PV), including passenger cars, utility vehicles and vans, posted a YoY degrowth of 86.97 percent and registered retail (dealer-to-customer) sales of 30,749 units. Worryingly, this decline is even greater than the 85 percent drop in PV wholesale numbers (automaker-to-dealer) reported last month. 

FADA estimates by end-May, out of 26,500 outlets about 60 percent showrooms and 80 percent workshops were operational across the country. Commenting on the results, Ashish Harsharaj Kale, president, FADA said, “While lockdown was gradually relaxed beginning May, auto dealerships and workshops opened for the first time after 40 days in many cities. May registrations are hence not indicative of the demand situation as the lockdown continued in many parts. The first 10 days of June witnessed extremely low demand despite most dealerships being now open for business. 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 return of complete lockdown persists.”

Dealer community to face tough year

With a projected annual de-growth of 35 percent by SIAM (Society of Indian Automobile Manufacturers) on top of the 18 percent de-growth faced last year, FADA is predicting the dealership community to face its toughest year ever as volumes are estimated to half in a span of 20 months. 

It says with no direct support as a business community, except for the moratorium extension given to all businesses, automotive dealers look forward to an early recognition as an MSME to avail government support for the survival, and for its over 40 lakh workforce.