Vehicle registrations in October rise by 5.11% MoM, but drop by 24% YoY

Wholesale auto numbers in the month of October gave a positive sign for vehicle sales recovery, however numbers on the retail front painted a different story altogether. According to October Vehicle Registrations data released by Federation Of Auto Dealers Association of India (FADA), Vehicle Registrations in October grew by 5.11% MoM, but gell by 24% YoY. 

In the month of October, 2-Wheeler registrations were down 26.82%, 3-Wheeler registration degrew by 64.50%, CV degrew by 30.32% and PV registrations degrew by 8.80%. 
Tractor sales however, continued their positive momentum, registrations grew by 55.53%

Vinkesh Gulati, President, FADA said, "October continues to see positive momentum on monthly basis but on a yearly basis the negative slide continues to increase.
9 days Navratri period witnessed robust vehicle registrations but could not save October to go in red as compared to last year when both Navratri and Diwali were in the same month.

He further added that New launches continued to be in demand in PV segment, entry level motorcycles witnessed a lean demand in 2-Wheeler segment.

The data also pointed out robust demand Small Commercial Vehicles demand due to local goods transportation back to pre-covid levels, but the Medium and Heavy Commercial Vehicles segment continued to bleed.

FADA has urged Government to urgently announce an attractive incentive based Scrappage Policy. Government should release funds for infrastructure projects which it has awarded as this will help demand generation and will lead to higher production of vehicles

As far as near term outlook is concerned, there is a sense of cautiousness amongst customers due to 3rd wave of Covid. FADA further stated that due to the lockdown announced in few European Countries, procurement of spares will also be a cause of hinderance for smooth supply of vehicles in Indian markets.

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The data also pointed out a worrisome point, inventory levels are at its highest during this Financial Year. FADA once again cautioned both OEMs and Dealers to keep a check on vehicle inventory as post festivals, demand may remain subdued which might impact dealers financial health thus leading closures and job losses.