Vehicle registrations data show four-wheeler sales bounced back during the festive season across most states. But two-wheeler sales are still about 20% below year-ago levels
Four broad segments of the Indian automotive sector are moving on four different tracks in their recovery in the post-lockdown world. Four-wheeler sales were back to pre-pandemic levels between September and November. The push came from the festive season, the big buying period for individuals. But the two-wheeler segment, the other component of personal transport, was still about 20% away from its year-ago level.
The remaining two segments pivot around movement of goods and public transport. Light commercial vehicles, which are ideal for short distances such as movement inside cities, were the sole point of buoyancy among goods vehicles. In overall recovery, goods vehicles sit a tad below the two-wheeler segment.
The fourth segment, public transport, remains stuck in the slow lane, bearing the brunt of a virus that has restricted people’s movement.
These are the key findings of a deep-dive into the monthly data from the Vahan dashboard, operated by the ministry of road transport and highways. This dashboard compiles data on all vehicles registered at 1,265 regional transport offices (RTOs) across India.
Thus, this data measures actual sales to the end consumer. This differs from sales reported by manufacturers, which are based on the number of vehicles moved to dealers. The difference between the two—the inventory lying unsold with dealers—has been a point of interest and speculation in recent months, as sales numbers reported by several auto companies have shown that business was back to pre-pandemic levels.
The question was how much of this was actual sales and how much was dealer inventory.
The Vahan data shows the bounce-back in the festive season in the four-wheeler segment was real. In each of the four months from August to November, registrations of cars and SUVs (sports utility vehicles) for personal use have bettered or matched their corresponding numbers for 2019.
But the same is not true for two-wheelers. The 2019 festive season, by itself, was not great for auto companies, but the 2020 numbers in each of the last four months in this segment were even lower. September was the best month for two-wheelers, when registrations were 9% below year-ago numbers. In the other three months, the deficit to 2019 levels was 19-26%.
This pattern can also be seen in the sales numbers for August to November reported by key listed companies and their corresponding Vahan registration numbers.
The two sets of numbers are not strictly comparable as Vahan currently doesn’t report numbers from RTOs in Madhya Pradesh, Andhra Pradesh, Telangana, and Lakshadweep. We arrived at an estimate for all-India Vahan numbers by extrapolating the share of these four states in total four-wheeler and two-wheeler registrations as per the Road Transport Yearbook of 2016-17, the latest available.
Among four-wheeler majors, our estimate of Vahan registrations of Maruti Suzuki, the market leader, trailed the sales numbers released by the company by 13%. The estimate of Vahan registrations of Hyundai was 10% higher than the sales figures reported by the company, which suggests its dealers offloaded older inventory.
In comparison, in the two-wheeler segment, our Vahan registration estimates for Hero MotoCorp and Bajaj Auto were 32% and 31% below the respective sales numbers released by them. This suggests a pileup of their two-wheelers with dealers.
Still, be it two-wheelers or four-wheelers, and across segments, most manufacturers moved into a higher gear in the September to November period. On a month-wise basis, they were selling within a 20% band of pre-pandemic levels. Some, such as Maruti, Hyundai and Yamaha, were back to pre-pandemic levels.
Like manufacturers, some states and Union territories (UTs) are doing better than others in recovery in two-wheeler and four-wheeler sales. Of the 32 states and UTs for which Vahan data was available, 20 showed a year-on-year increase in four-wheeler registrations between September and November. Two of these were Jammu and Kashmir (J&K) and Ladakh, which were under security restrictions in 2019 following the scrapping of Article 370 of the Constitution. Other leaders were West Bengal (36% more than year-ago figure), Nagaland (34%) and Himachal Pradesh (26%).
By comparison, just seven states and UTs have shown an increase in two-wheeler registrations. Beyond J&K and Ladakh, an increase was seen in Nagaland, West Bengal, Himachal Pradesh, Tamil Nadu and Jharkhand.
Greater challenges lie ahead for the auto sector. The festive season is the big selling period and tends to provide a bump. How these numbers move in the coming four months will signal how strong and sustainable this recovery is.
www.howindialives.com is a database and search engine for public data
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