Vehicle Registrations At An 8-Year Low: FADA Report

The second wave of COVID-19 has battered the country along with industries. The automotive industry, already reeling under a decline before COVID-19 made an appearance, has now fallen to an 8-year low in terms of vehicle registrations. FADA says that a total of 1,52,71,519 vehicles were registered in FY20-21. This is a drop of 30 per cent over 2,17,68,502 units registered in FY19-20. In fact, the numbers for FY20-21 are at an 8-year low, even lower than FY-13 numbers, which basically shows that the Indian auto industry is grappling with an unprecedented crisis and has sort of gone back at least eight years behind.

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(FADA says that the total number of vehicles registered in FY20-21 were 1,52,71,519 units)

All vehicle categories except tractors saw significant declines with commercial vehicles and three-wheelers seeing the heaviest declines of 64 and 49 per cent. Similarly, the registrations for April 2021 fell 28 per cent month-on-month. FADA noted that the total number of vehicles registered in April 2021 was 11,85,374 units which is a drop of 28.15 per cent over the 16,49,678 units registered in March 2021. FADA says that since the month of April 2020 was under full lockdown, with many OEMs registering no sales at all, it is unwise to compare April 2021 data with last year. Three-wheeler and tractor registrations declined 43.11 and 44.58 per cent in April 2021 while two-wheelers, passenger vehicles and commercial vehicles saw a decline of 27.63, 25.33 and 23.65 per cent respectively.

Commenting on how April'21 performed, FADA President, Vinkesh Gulati said, "India is currently facing one of its toughest times with 2nd wave of covid creating a havoc in everyone's life. This time, the spread is not only limited to urban markets but has also taken rural India in its grasp.

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(Registrations for overall vehicles in April 2021 fell 28.15 per cent over March 2021) April 2020 was a write-off for all practical purposes)

With close to 95 per cent of India under either a partial or a full lockdown, FADA says that the sales and registration during the first nine days of May 2021 have been lean as well. The outlook for May 2021 is said to be sluggish and since the lockdowns have been imposed by state governments, there has been no announcement with respect to any relief measure of any kind. FADA says that the second wave of COVID-19 has struck rural India and therefore, recovery is likely to take longer. In fact, FADA believes that the automotive industry in India is likely to recover fully only by FY-23.

FADA expects the Monsoon to bring in some measure of relief as India expects to get average rains this year, which in turn should lead to a high farm output. A good Monsoon is also likely to raise the demand for tractors and two-wheelers, which could have a rub-off on the industry in terms of recovery.