Auto sales slide 25% in April amid lockdowns

Showroom sales of passenger vehicles fell 25.3% sequentially to 208,883 units during April, showed data issued by the Federation of Automobile Dealers Associations (Fada) on Monday. Vehicle sales were hit initially due to lockdown measures imposed in Maharashtra to contain the spread of the pandemic. Several other states started taking similar steps from the second half of April, further impacting sales.

Vehicle sales are usually compared on a corresponding basis, but in April last year, automakers had to close their factories and showrooms as the Union government imposed a strict nationwide lockdown from 25 March. Subsequently, operations remained suspended till the first week of May and, in some cases, till early June.

Vinkesh Gulati, president of Fada, said registrations of new vehicles in April fell in double digits on a month-on-month basis as most states initiated lockdown measures—either partially or fully—from the first week of April. It began with Maharashtra, followed by Chhattisgarh, Delhi and Rajasthan, among others.

“Fada humbly requests auto manufacturers to handhold their dealers the way they did last year during the first phase of the pandemic as the situation is very grim in most states, and dealer principals, as well as their teams, are fighting for their survival. Fada also requests the government to come out with a financial package the way they did last year. We also request RBI to come out with guidelines/notifications for relaxation of loan repayment equivalent to the tune of the number of days of lockdown each state has announced,” Gulati said.

The sudden surge in coronavirus cases has also taken a toll on manufacturing and construction, which impacted sales of commercial vehicles that fell 23.7% sequentially in April to 51,436 units.

Registration of two-wheelers also declined 27.6% sequentially in April to 865,134 units as the spread of covid infections in rural areas led to a sharp fall in customer sentiment during the marriage season. Demand for two-wheelers, especially in the entry-level segment, has been softening due to an increase in vehicle prices and the resumption of public transport.

Overall, vehicle sales dropped 28.1% to 1.19 million units in April.

In FY21, registrations of passenger vehicles declined 13.9% to 2.77 million, while the same for two-wheelers fell 31.5% to 16.83 million units, according to Fada. Showroom sales of commercial vehicles also declined 49% to about 881,000 units.

“The first nine days of May has seen extremely lean sales. Lockdown also means dealership outlets will have to remain closed. Considering the rising number of cases, one can expect the peak in terms of infections for India, on the whole, could be at least a fortnight away,” Fada said in a statement.