Total vehicle retail for the month of June’21 rise by 22.62% YoY on a low base. When compared to June’19 (a regular pre-covid month), retails are still down by -28.32%.
On YoY basis, all categories were in green with 2W up by 17%, 3W up by 22%, PV up by 43%, Tractor up by 14% and CV up by a massive 236% (on a very low base due to non-availability of BS-6 vehicles).
Positive momentum from June carries forward to July. With Southern India opening up, we can expect further pickup in demand.
While daily infection cases have been contained offering some respite from the debilitating second wave, however the new virus mutants and the impending 3rd wave continue to pose as risks on a longer term.
FADA thanks the Government of India to bring entire Auto Retail under MSME. This will help the industry at a time when gears are down.
The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for June’21.
Commenting on how June’21 performed, FADA President, Mr. Vinkesh Gulati said, “The month of June witnessed re-opening for most of the states except the ones in South. Due to this, the industry witnessed a high pent up demand which was stuck in the system because of statewide lockdowns.
While all the categories were in green, Passenger Vehicles maintains to see good demand as customers continued to show keenness in vehicles for observing social distancing and safety of their families. Two Wheeler category though in green has witnessed a softer recovery as rural market is taking time to get back from post covid stress. Commercial vehicle segment has seen a staggering growth over last year, though on a very low base as there were product shortages due to BS-6 transition.
Overall, the Industry is still not out of the woods. When compared to June’19, we are still in red by -28% with 3W and CVs taking the max hit as they are down by -70% and -45% respectively. Only Tractors continue to grow as it was up 27% compared to June’19.
FADA is thankful to the Government of India and previous MSME Minister, Shri Nitin Gadkari for bringing entire Auto Retail under the ambit of MSME. This will definitely help Auto Dealers in multiple ways, may it be lower cost of financing or lower utility rates to name a few.
Near Term Outlook
Positive momentum from June carry forwards to July. With southern India opening up, we can expect further pickup in demand. On a longer term, Auto Industry is yet to see retail numbers comparable to FY 19.
Continued global semi-conductor shortage is impacting demand – supply mis-match thus restricting the growth of Passenger Vehicles. On one hand, while the new virus mutants and a prediction of 3rd wave in August are effecting sentiments, the revival of monsoons in July after a pause of 2 weeks and a better vaccination drive rate continues to build some hope.
We will therefore have to wait and watch how the overall economy shapes up over the next couple of months. We hence see demand to be a mixed bag and hope that recovery is back on track by the time Navratri and Diwali knocks our door.
Inventory at the end of June’21
Average inventory for Passenger Vehicles ranges from 30-35 days
Average inventory for Two – Wheelers ranges from 20-25 days