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Auto industry down in April. May doesn't look 'changa si', either

Vehicle registrations fell 28 per cent in April, with all categories showing losses

automobile rep Representational image

The second wave of the pandemic has given a second layer of worry lines to India’s troubled auto industry sector. Vehicle registration data released on Monday morning shows that auto sales have not only crashed last month by an overall 28 per cent (month on month), the indications from the first week of May show danger signals.

This decline brings India’s auto industry levels down to those of nine years ago.

This time, the havoc seems to have spread its grasp into rural India, too. Federation of Automobile Dealers Association (FADA), which released the registration data, also pointed out that the demand trend in the first nine days of May shows extremely weak consumer sentiment—a logical conclusion given that nearly 95 per cent of the country is under a full, or partial, lockdown.

While April last year was the first time when vehicle sales plummeted to zero due to the national lockdown, sales this April also did not augur well. This despite the fact that most of the restrictions started coming into force only towards the latter part of the month. Total vehicle registrations fell 28 per cent, with all categories showing hefty losses.

This is worse than last year, when at least tractors showed an increase (16 per cent), as the rural economy was largely spared the ill effects of the coronavirus spread. However, there seems to be no such small mercies this year, with the drop in two-wheeler registration at 28 per cent, cars and passenger cars at 25 per cent and commercial vehicles at 24 per cent.

Tractors, in fact, show a steep drop of 45 per cent, clearly pointing to the fact that all is not exactly well in the hinterland.

“Auto registrations for the month of April witnessed double-digit fall to the tune of -28 per cent, as most of the Indian states started going under lockdown (partial as well as full) beginning April 5th onward,” pointed out FADA president Vinkesh Gulati. The organisation also called on the government and RBI to come out with a financial package and relaxation of loan repayment, with the new guidelines for loan repayment to be “equivalent to the tune of the number of days of lockdown each state has announced”.

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