Passenger Vehicle Retail sales Down 9% In October 2020: FADA

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

October’20 Registration

Commenting on how October’20 performed, FADA President, Mr. Vinkesh Gulati said, “October continues to see positive momentum on monthly basis but on a yearly basis the negative slide continues to increase. The 9 days Navratri period witnessed robust vehicle registrations but could not save October to go in red as compared to last year when both Navratri and Diwali were in the same month.

While new launches continued to be in demand in Passenger Vehicle segment, entry level motorcycles witnessed a lean demand in 2-Wheeler segment. With supply side mismatch, most of the passenger vehicle dealers ended with limited stock of high selling items and odd variants which did not attract much demand. This coupled with lower discounts, compared to last festivals also played a spoilsport.

While Small Commercial Vehicles are seeing robust demand due to local goods transportation back to pre-covid levels, the Medium and Heavy Commercial Vehicles segment continued to bleed. FADA urges the Government to urgently announce an attractive incentive based Scrappage Policy. It also requests the Government to release funds for infrastructure projects which it has awarded as this will help demand generation and will lead to higher production of vehicles.

The Government’s continued procurement of Kharif crops at MSP from farmers is leading to a higher disposable income in rural India. This continues to show robust demand in Tractor segment which grew at a healthy 55% YoY.”

Near Term Outlook

As we enter the last leg of festivals and with Covid getting into its 3rd wave in many cities, there is a sense of cautiousness amongst customers. Due to the lockdown announced in few European Countries, procurement of spares will also be a cause of hinderance for smooth supply of vehicles in Indian markets. This will create a supply and demand mismatch thus affecting the passenger vehicle sales.

FADA once again cautions both OEMs and Dealers to keep a check on vehicle inventory as post festivals, demand may remain subdued. Since Inventory levels are at its highest during this Financial Year, it may impact Dealers financial health thus leading closures and job losses. 

Key Findings from our Online Members Survey

• Sentiments
• 
  
  • 43% dealers rated it as Good
  • 42.6% dealers rated it as Neutral
  • 14.3% dealers rated it as Bad
• Liquidity
• 
  
  • 43.8% dealers rated it as Good
  • 41% dealers rated it as Neutral
  • 15.1% dealers rated it as Bad
• Expectation in November
• 
  
  • 37.1% dealers rated it as Flat
  • 33.1% dealers rated it as Growth
  • 29.9% dealers rated it as De-growth
• Inventory
• 
  
  • Average inventory for Passenger Vehicles ranges from 35 – 40 days
  • Average inventory for Two-Wheeler ranges from 50 – 55 days

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

All India Vehicle Registration Data for October’20