FADA: Auto registrations plunge 90% due to lock-down; dealers struggling

Vehicle registrations during May 2020 tumbled almost 90 per cent as the country continues to battle with coronavirus.


As per the Federation of Automobile Dealers Associations (FADA), vehicle registrations during May 2020 tumbled almost 90 per cent as the country continues to battle with coronavirus (COVID-19) and the nation-wide lock-down.

The demand trend in first 10 days of June shows extremely weak consumer sentiment and fear of COVID-19’s community spread and a further lock-down is keeping customers away from purchases.

As per to FADA, lakhs of jobs and survival of hundreds of dealers is at stake if demand de-growth predictions hold true and operating economics remains unchanged.

The apex body of automobile retail industry’s monthly statement said that there is no direct support for dealership community hit hard by the COVID-19 as its micro, small and medium enterprise (MSME) status is still under consideration.

FADA says it once again appeal to the union government to stimulate demand in the short term and support auto industry and millions of jobs.

Ashish Harsharaj Kale, president of FADA, quoted, “For the first time in history, the month of April witnessed zero retails. While lock-down was gradually relaxed beginning May, auto dealerships and workshops opened for the first time after 40 days in many cities. At the end of May, out of 26,500 outlets about 60% showrooms and 80 per cent workshops were operational across the country. May registrations are hence not indicative of the demand situation as the lock-down still continued in many parts.”

“Mobility still being a necessity and not luxury in a growing country like ours, demand stimulus along with credit support can bring auto sales back in positive zone within 30-60 days and help shore up consumer confidence,” president, FADA added.

During May 2020, registration of three-wheeler (3W) and commercial vehicles (CVs) were the hardest hit. Registration of 3W fell by 96.34 per cent to 1881 units from 51,430 units, while CV registration tumbled 96.63 per cent to 2711 units from 80,392 units, FADA says.

Two-wheeler (2W), passenger vehicles (PVs) and tractor registrations tumbled by 88.80 per cent, 86.97 per cent and 75.58 per cent, respectively.

FADA says, a projected annual de-growth of 35 per cent by SIAM on top of the 18 per cent de-growth faced last year, the dealership community is facing its toughest years ever as volumes are estimated to half in a span of 20 months.