Green shoots: Downslide in vehicle registration eases in June

In May, the downslide rate in vehicle registration had plunged by 88.87 per cent on a YoY basis.

New Delhi:  The downslide in vehicle registration eased in June, but was still rooted in the red on a year-on-year basis.

Accordingly, the Federation of Automobile Dealers Associations’ data showed that vehicle registration in June declined by 42 per cent on a YoY basis to 9,84,395 units from 16,97,166 units off-take during the same month of last year.

In May, the downslide rate in vehicle registration had plunged by 88.87 per cent on a YoY basis.

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On a sequential basis, June’s vehicle registrations were higher than that of May, when the off-take stood at 2,02,697 units.

Notably, the trend shows that India’s auto sector continued to reel under the economic impact of the Covid-19 outbreak.

Commenting on the data, FADA President Ashish Harsharaj Kale said: “Unlock 1.0 coupled with an increase in demand from the rural market has boosted the retail sales concerning the May numbers.”

“At the end of June, almost 100 per cent dealership outlets (showrooms and workshops) were operational across the country, barring a few cities and towns which have once again implemented stringent lockdown.”

Besides, he said that June registrations, although better than May, are still not indicative of the actual demand situation as the lockdown woes continue in some parts and supply side is far from its full potential.

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

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

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

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