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Vehicle Registration Across India Dips 88.8 Percent in May Due to Covid-19 Lockdown

Image for Representation (Reuters)

Image for Representation (Reuters)

FADA said that while there has been a substantial pick up in auto retails in comparison to May, the overall outlook continues to be grim.

India's auto sector continues to reel under the economic impact of the Covid-19 outbreak, as vehicle registration during May plunged by 88.87 per cent on a YoY basis.

Accordingly, the Federation of Automobile Dealers Associations' data showed that vehicle registration data for May declined to 2,02,697 units from 18,21,650 units off-take during the like month of last year.

Commenting on the data, FADA President Ashish Harsharaj Kale said: "For the first time in history, the month of April witnessed 'Zero Retails'. While lockdown was gradually relaxed beginning May, auto dealerships and workshops open for the first time after 40 days in many cities."

"At the end of May, out of 26,500 outlets about 60 per cent showrooms and 80 per cent workshops were operational across the country."

Besides, he said that May's registrations are not indicative of the demand situation as the lockdown still continued in many parts.

"First 10 days of June witnesses extremely low demand despite most dealerships which are now open for business," he said.

"Weak consumer confidence, especially in urban areas, continue to haunt as customers stay away from concluding their purchase due to threat of community spread and return of complete lockdown persists."

Besides, the association gave a grim outlook.

"With an assumption of no further lockdown and continued reopening measures, there will be substantial pick up in Auto Retails in comparison to May, but the overall outlook continues to be grim with projected sales to witness a de-growth upwards of 25 per cent YoY," he said.

"Urban Demand will continue to face challenges ahead with Covid-19 uncertainty. On the flip side, the government's push for infrastructure spending and the recent positive measures announced for Agriculture sector will help support rural demand. It will further strengthen with the normal spread of monsoon which will help Tier 2 and 3 Dealers face lesser de-growth compared to their urban colleagues."

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