It hasn't been a good start for the Indian auto industry in FY2021. The already saddled industry has taken a major hit from the coronavirus lockdown and is still bearing the aftershock of the crisis. Dealerships that are at the forefront of this crisis have borne the brunt of the situation and that reflects in the retails sales figures as well. According to the data published by the Federation Of Automobile Dealers Association (FADA), overall retail sales in the Indian market went down by 36.27 per cent at 11,42,633 units in July 2020 as compared to 17,92,879 units in the same month last year.
Also Read: Two-Wheeler Sales Pick Up In July 2020, But OEMs Remain Cautious
Customer sentiments continue to be low post the lockdown.
The passenger vehicle segment witnessed a decline of 25.19 per cent retailing 1,57,373 units as compared to 2,10,377 units in the same month last year. Retail sales of commercial vehicles went down by 72.18 per cent at 19,293 units against 69,338 units sold a year ago. Retail sales of three-wheelers went down by 74.33 per cent at 15,132 units as compared to 58,940 units sold a year ago. The two-wheeler segment witnessed a decline of 37.47 per cent recording a decline of 8,74,638 units as compared to 13,98,702 units sold a year ago.
Automakers are expecting sales to revive during the festive season period.
Sales across segments have been subdued even in the month of July as customer sentiments continue to be negative and even dealerships are not able operate at full strength as yet. According to FADA, Rural market has continued to show strong growth as monsoon continues its good spell and tractors, small commercial vehicles and motorcycle sales have also shown signs of recovery. However, the commercial vehicle segment is still struggling to pick up, being directly impacted by the slowdown in economic activities such as transits, infrastructure build up and construction activity. Moreover, banks and NBFCs are still having a cautious approach towards funding auto retail affecting the demand revival especially for the CV segment.
Sales of commercial vehicles have been impacted significantly due to liquidity crunch and slowdown in economic activities.
In terms of outlook, FADA is expecting some revival in sales from August which marks the start of the festive season period with Onam and Ganesh Chaturthi. carandbike also got in touch with some of the dealerships and on a common note they all agreed to be struggling their way out of the slowdown and issues like payment of the fixed costs of labour, rent and electricity among others have been bothering them much. Inventory level has also been low at dealerships due to slump in production and increase in transit time. Having said that, automakers are trying to build up inventory level ahead of the festive season period, hence we can expect a gap in wholesale and retail numbers for a few month going forward.
Two-wheeler sales have picked-up in rural areas.
FADA has also said that the OEM's should to be equally active with the wholesale billing in tune with retail sales in a bid to avoid Dealer Inventory build-up. The full year Outlook still continues to remain negative with a projected de-growth between 15 per cent and 35 per cent in retail sales.
As we already mentioned, automakers have been trying to meet the inventory gap at the dealership level ahead of the upcoming festive season. Dealerships have been running at a low inventory level as transit came to a halt during the lockdown period and haven't picked up the pace yet, post the lockdown. July is also the month when lockdown was eased off generously in a bid to facilitate sales. Hence, the difference between the wholesale and retail sales has been more than usual in the month of July.
Also Read: Car Sales July 2020: Maruti Suzuki Sells 1.08 Lakh Units
Maruti Suzuki despatched 108,064 units in July 2020.
While Maruti Suzuki India despatched 108,064 units in July 2020, dealers across the country have retailed 79,315 units in the same month which is a difference of 26.60 per cent.
Also Read: Car Sales July 2020: Hyundai Sales Down By 28 Per Cent
Hyundai India despatched 41,300 units o the Creta last month.
Hyundai India despatched 41,300 units in July while dealers retailed 29,413 units, a difference of 40.41 per cent.
Also Read: Car Sales July 2020: Mahindra's Sales Down By 36 Per Cent
Mahindra despatched 11.025 units last month.
Mahindra despatched 11,025 units last month while its dealers retailed 7811 units, a difference of 29.15 per cent.
Also Read: Car Sales July 2020: Renault Registers Growth Of 75.5 Per Cent
Renault despatched 6422 units in India in July 2020.
Renault India had despatched 6422 units in July 2020, while its dealers retailed 4997 units in the same month, a difference of 22.18 per cent.
Also Read: Car Sales July 2020: Toyota Registers Degrowth Of 48 Per Cent
Toyota despatched 5386 units last month in India.
Toyota Kirloskar despatched 5386 units in July 2020 while its dealers retailed 4,396 units in the same month, a difference of 18.38 per cent.
Also Read: Car Sales July 2020: Honda Cars India Sells 5863 Units
Honda despatched 5863 units in India in July 2020.
Honda Cars India despatched 5863 units last month while its dealers retailed 4396 units in the same month which is a difference of 25.02 per cent.
