Home >Auto News >Retail auto sales dive 87% in May amid lockdown

Retail sales of passenger vehicles plunged 87% in May from a year earlier to 30,749 units as dealerships gradually reopened but the lockdown aimed at arresting the spread of the coronavirus pandemic and fears of contracting the infection kept most customers away.

Retail sales of trucks and buses recorded a bigger drop, falling nearly 97% from a year earlier to just 2,711 vehicles, showed data issued on Thursday by the Federation of Automobile Dealers Associations (Fada), as the nationwide lockda), as the nationwide lockdown stifled economic activity.

Showroom sales of motorcycles and scooters also dropped 89% to 159,039 units during the month. Overall, total retail sales of automobiles in India across segments declined 89% to 202,697 units.

The government eased some of the strict lockdown measures to allow automakers to open some showrooms and service centres from the first week of May.

Out of 26,500 dealership outlets, about 60% of the showrooms and 80% of workshops were operational across the country at the end of May, said Ashish Harsharaj Kale, president, FADA.

Hence, registrations in May are not indicative of the demand situation as the lockdown was still in place in several areas, he said.

“With an assumption of no further lockdown and continued reopening measures, there will be a substantial pickup in retail sales of automobiles in June in comparison to May, but the overall outlook continues to be grim, with projected sales to witness a decline of more than 25% compared to last year," Kale said.

The Society of Indian Automobile Manufacturers (Siam) has forecast a 35% drop in vehicle wholesales this fiscal, following an 18% decline in the previous year.

“This leaves the dealership community facing its toughest years ever as volumes are estimated to halve in a span of 20 months," Kale said.

Retail sales of two-wheelers, though, are forecast to recover in the coming months on expectations of a quicker revival in demand in the rural and semi-urban markets due to a good summer crop, benefits of recently announced government schemes and expectations of a good monsoon.

Sales of passenger vehicles may decline 22-25% this fiscal to a decade low of 2.65 million units with the coronavirus-induced economic slowdown drastically affecting household incomes, Crisil Ltd said in a report on Thursday.

In a report last month, the rating agency has predicted commercial vehicle sales to fall 26-28% this fiscal year due to the impact on economic activity from the pandemic and companies implementing steps to control cost.

Crisil has forecast the Indian economy to contract 5% in fiscal 2021.

Kale said automobile demand in urban markets will continue to face challenges amid the uncertainty caused by the pandemic.

“On the flipside, the government’s push for infrastructure spending and the recent positive measures announced for the agriculture sector will help support rural demand. It will further strengthen with the normal spread of monsoon which will help dealers in tier-II and -III cities arrest the decline in sales compared to their urban counterparts," he said.

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