Sometimes, good news is never good enough. The retail sales figures of automobiles in the country last year is an example of this. On the face of it, overall sales rose 22 per cent this year, compared with June last year, with all categories showing a spike.
However, that is cold comfort, considering that the comparison is with June 2020, when most parts of the country were still in lockdown, or just about coming out of it with many restrictions still in place. While all categories showed an increase—two-wheeler sales were up by 17 per cent, passenger vehicles up 43 per cent, tractors up 14 per cent and commercial vehicle sales increased by a massive 236 per cent (as barely any vehicles were available due to the switch to BS 6 last summer)—they are still lower than pre-pandemic figures.
“Overall, the industry is still not out of the woods,” admits Vinkesh Gulati, president of the Federation of Automobile Dealers Association (FADA), which released the figures on Thursday morning, pertaining to retail sales.
This is because once you compare the figures to pre-pandemic data, the figures show a drop of 28 per cent. Three-wheelers and commercial vehicles, the two categories considered an indicator of commercial economic activity, were the most hit, down by 75 per cent and 45 per cent, respectively. Not to mention, of course, that June 2019, though pre-COVID, was also bang in the middle of a protracted economic slowdown in the country.
The figures come to 9.3 lakh two-wheelers sold last month, compared with 7.9 lakh last June (and 13.3 lakh in 2019). For passenger vehicles, sales rose from 1.2 lakh last June to 1.8 lakh last month (though it was over 2 lakh in June 2019). The total number of vehicles sold through retail last month was 12.17 lakh, much higher than the 9.92 lakh sold in June 2020, and way lower than the nearly 17 lakh sold in June 2019.
But it is heartening the industry has been seeing positive signals—South India is yet to open up, which means there is scope for pent-up demand translating into high sales in that region. Auto retail has also been brought under the ambit of the MSME sector, entitling it to many benefits and sops. “This will definitely help auto dealers in multiple ways, may it be lower cost of financing or lower utility rates,” hoped Gulati.
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While South India is expected to be the big bright spark in July, worries abound over new virus mutants and the impending third wave. “(They) continue to pose as risks on a longer term,” said a FADA statement.
While these figures pertain to monthly sales at showrooms and online, the industry data by the Society of Indian Automobile Manufacturers (SIAM), the automakers body, will be indicative of how the factories are performing and whether production levels have perked up since the shutdown of plants by many top auto makers in April and May as workers started falling ill. It will also be indicative of how the sector fared in the whole April-June period of the second COVID wave, compared with the first one last year. That data is expected early next week.
