October fails to bring expected cheer for Automobile industry

~ by Trinanjan Chakraborty

The onset of the festive season in the country has not been able to provide enough impetus to the automotive sector, official figures released by Federation of Automobile Dealers’ Association (FADA), apex national body representing automobile dealers in India showed. Total vehicle registrations in the country during October’20 stood at 14,13, 549 – down 23.9% from the corresponding number in Oct’19 (18,59, 709). The change in individual segments is represented in the below chart:

Vehicle registrations: Change from Oct’19 to Oct’20 (source: FADA)

As can be observed, the toughest hit segment has been 3-wheelers with registrations becoming almost a third of what they were a year back. Sharp falls also observed in registrations of commercial vehicles and 2 wheelers. The only segment which bucks the trend is Tractors – with registrations increasing by a whopping 55.53% on back of what has been a very good harvest season in the country.

Compared to last month, there was a positive trend with vehicle registrations in October up by 5.11% from Sep’20. With Diwali falling in November this year, the festive push in October was mainly limited to the period of Navaratri. Also compared to other years, the festive season discounts were relatively muted this year thus failing to drive sales. FADA is hopeful that the Diwali period will bring further push for the sector but is cautious given the continued rise of Covid-19 cases in some parts of the country like Delhi and Kerala and warnings of a potential 3rd wave in the country from experts. Also renewed lockdowns in several European nations could hamper supply of spare parts thus impacting delivery to end clients.

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