FADA Releases June’20 Vehicle Registration Data

The Federation of Automobile Dealers Associations (FADA) has released the Monthly Vehicle Registration Data for the Month of June’20.

June’20 Retail Sales

Commenting on how June’20 performed, FADA President, Ashish Harsharaj Kale said, “Unlock 1.0 coupled with the increase in demand from the rural market has boosted the retail sales with respect to the May month’s numbers.

At the end of June, Almost 100% dealership outlets (showroom and workshops) were operational across the country, barring a few cities and towns which have once again implemented stringent Lockdown.

June registrations, although better than May is still not Indicative of the actual demand situation as Lockdown woes continue in some parts and supply side is far from its complete potential.

Overall weak economic sentiments coupled with rising number of Covid-19 patients has led to weak consumer confidence especially in Tier – 1 cities, as customers stopover from concluding their purchase as fear of community spread and therefore a return of complete lockdown persists.

Rural market lead by a robust crop situation of previous harvest and timely arrival of monsoons has witnessed demand recovery in comparison to urban areas, therefore leading surge in retail sales of tractors as well as positively impacting 2W and Small Commercial Vehicles.

The Positive Rural Sentiment if backed with demand boosting measures by the Government  can ensure the quickest return to normalcy of the Auto Industry, amongst all Core Industries, thereby impacting the Overall Consumer Sentiment Positively.

FADA would once again urge Our Government for urgent introduction of Attractive Incentive based Vehicle Scrappage Policy which today is one of the dire needs for the revival of the Commercial Vehicle Sector and especially M&HCV’s, as the sector faces major headwinds in demand revival.”

Outlook for July

With an assumption of no further lockdown and continued reopening measures, it is anticipated that Vehicle Registrations will see somewhat similar trends and mostly will better the June numbers, with further green shoots of demand in newer geographies and segments.

Overall Auto demand  though continues to be a challenge coupled with supply side constraints as well Constraints in Retail Lending from NBFC’s, normalcy in demand still seems quite distant and not before the festive season.

Despite the positive trends in the rural markets, the Annual Outlook currently continues to be grim with projected sales to witness a de-growth range of 15% - 35% across various segments in FY21, except for the Tractor segment, which looks set to clock a positive annual growth.

Chart showing Vehicle Registration Data for June’20 with YoY comparison can be found below:

Vehicle Registration Data for June’20

Source: FADA Research