The sales in auto industry are showing positive signs of growth but still a long way to go. As can be seen from the sales figures, two-wheeler registrations have shrunk by 38 per cent over past year and four-wheeler registrations have shrunk by 45 per cent.
Secretary, Goa Automobile Dealer Association (GADA) and director, Goa Rajee Auto Pvt Ltd, Vallabh Kuncoliencar said, “Most of the dealers registered almost zero sales in April. Month of May, June and July were dismal with almost 70% decline in registrations over previous year. With the onset of festive season, the demand slightly picked up in August and the momentum got carried forward in October and November during Dusshera and Diwali. There has been month on month growth post lockdown which is a positive sign. But the overall picture looks still grim with 38% de-growth in two-wheelers and 45% de-growth in four wheelers on year-on-year basis.”
Kuncoliencar further added that there have been several supply constraints from manufacturers also. Due to COVID-19 related restrictions, the production is not as per schedule and supply is hampered. The situation is slowly and gradually coming back to normal. Being a manpower intensive industry, vehicle dealerships were really struggling to stay afloat during lockdown with huge salary bills and other fixed expenses. With markets slowly picking up, dealers are hopeful that the situation will improve and normalise over a period of time.
President of GADA Prashant Joshi said, “We were not confident when the lockdown was lifted on May 4. The sales were very low in May but it started picking up from the month of June. We have still not reached pre-COVID levels. According to the data on four wheelers the sale is just above 50% and for two-wheelers it is about 60%. Even due to COVID-19 the sales in October, November was fair during the festive seasons. We are seeing a V-shaped recovery in auto sales.”
When asked what could be the reason for this pent up demand for vehicles in India, Joshi said, “The pent up sales could be because many who were planning to buy a vehicle next year have bought it this year as they are no longer very comfortable with public transport due to COVID-19. Also, in Goa we do not have a robust public transportation system and there is no Ola or Uber and hence owning a private vehicle becomes essential.”
Former President of GADA and President of GCCI, Manoj Caculo said, “As is evident from the data there is substantial de-growth in the automotive market in Goa. The entry-level economical models have almost reached pre COVID-19 numbers but the higher end segment is suffering tremendously with some de-growth as high as 75 per cent. Some of the gap is filled by new entrants like Kia and MG who were not in the market pre-COVID-19.”
Founded in 1964, Federation of Automobile Dealers Associations (FADA), is the apex national body of automobile retail industry engaged in the sale, service and spares of 2/3 wheelers, passenger cars, UVs, commercial vehicles (including buses and trucks) and tractors. FADA represents over 15,000 automobile dealers having 25,000 dealerships including 30 associations of automobile dealers at the regional, state and city levels accounting for 90 per cent of market share in India.
Chief executive officer of FADA Saharsh Damani said, “There are two scenarios. The first, since the unlocking began we are seeing a growth every month which means the sales are increasing every following month from May 2020 onwards and there is a healthy recovery which we are observing. In fact if we see the figures of November this year, the sales grew by 29-30 per cent compared to the figure of October 2020.” (See Chart 3)
He further added, “Auto industry is witnessing a V-shaped recovery on a monthly basis but still on the yearly basis and if we compare the current month with the last year’s same month, there is obviously a gap. On yearly basis we are still down by 19-20 per cent.”
Saharsh Damani explained that the new launches and especially compact SUV’s continued to show good demand in PV segment. The focus in two wheelers continued its shift from 100 cc to 125 cc and above category due to good harvesting coupled with Dhanteras, Diwali and marriage season. Small goods commercial vehicles continued to see good demand with increased level of transportation and last mile connectivity needs. With safer means of travel in customer’s mind and schools and colleges continued to remain closed, demand of bus remains weak. Similarly, M&HCV segment continues to play spoilsport with excessive capacity, high prices of BS-6 models, finance issues and higher fuel prices.
