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File photo used for representational purpose. (Bloomberg)
File photo used for representational purpose. (Bloomberg)

Auto retail witnessed bloodbath in May, sales down 55%: FADA

  • Passenger vehicles' sales trip by 56% in May, compared to April, while sale of two wheelers fell by 53%.
  • Near-timely arrival of monsoons and some semblance of recovery in sales in first nine days of June may bring an iota of relief, notes FADA.

The Federation of Automobile Dealers Associations (FADA) on Thursday released monthly vehicle retail data for the month of May and, on expected lines, the numbers painted a very grim picture. As per the data, sales fell 55% last month, compared to figures from April with passenger vehicles suffering the brunt of the hit.

Pointing out that comparing months of May in 2021 and 2020 cannot be done owing to these being lockdown months, FADA stated that comparisons have been done between last month and the month before, as well as with May in 2019.

As per the data, three-wheeler sales saw a month-on-month decline of 76% while two-wheelers' sales slipped by 53%. The fall was across all other segments as well with passenger vehicles' sales falling by 56% and commercial vehicles by 66%. Tractor sales had fared reasonably well during the first wave of the pandemic but even these saw a 57% month-on-month fall in May, largely due to the second wave of the pandemic spreading to rural parts of the country.

Vinkesh Gulati, FADA President, pointed out that the second wave of the pandemic has been especially severe and the consequent lockdowns in most of the country had a massive impact on auto retail sector. "The second wave of Covid has left the entire country devastated as there may not be a single household which did not get affected," he said. "Apart from urban markets, this time, even rural areas were badly hit. May saw continued lockdown in most of the states."

Highlighting that the auto retail fraternity is in need of support, FADA sent out a request to OEMs to announce financial assistance to their respective channel partners.

FADA also appealed to Prime Minister Narendra Modi to let banks allow a motatorium of 90 days to all categories of dealers without keeping a turnover limit.

The worst may be over but the path ahead remains grim, more so because many parts of southern India continue to be under lockdown. But there may be silver linings courtesy near-timely arrival of monsoons and some semblance of recovery in retail in the first nine days of June.

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