Extended festive season helps PV makers clock growth in November, overall industry retail in the red: FADA

The Federation of Automobile Dealers Associations (FADA) today released the monthly vehicle registration data for November. The overall industry retails (2Ws, 3Ws, PVs, CVs and tractors) came at 1,827,990 units, a drop of 19 percent compared to same period last year.

Interestingly, the passenger vehicle segment reported positive growth for the month compared to same period last year. Overall passenger vehicle sales came at 291,001 units, a growth of 4.17 percent compared to November 2019.

Commenting on how November performed, Vinkesh Gulati, president, FADA said, “Automobile industry has seen one of the best recovery rates since unlocking began as November continues to see positive momentum by growing 29.32% on MoM basis. On YoY basis, the negative slide continues with degrowth of -19.29%.”

According to the dealer body, the 42-days festive period saw good traction in the current pandemic hit the world as overall degrowth of 4.74 percent was much less than expectation. While registrations during Navratri were tepid, people came out in good numbers to purchase vehicles during the Dhanteras – Diwali period. The tractor segment continued to gallop ahead. The fear of pandemic leading to safer means of travel for the entire family saw good sales in passenger vehicles as it grew in double digits at 13.6 percent.

Furthermore, new launches and specially compact SUV’s continued to show good demand in PV segment. The focus in 2W continued its shift from 100cc to 125cc and above category due to good harvesting coupled with Dhanteras-Diwali and the marriage season.

Small goods commercial vehicles continued to see good demand with an increased level of transportation and last-mile connectivity needs. With safer means of travel in the customer’s mind and schools and colleges continued to remain closed, the demand for buses remains weak. Similarly, the M&HCV segment continues to play spoilsport with excessive capacity, high prices of BS-VI models, finance issues, and higher fuel prices.

“FADA once again urges our government to increase infrastructure spending including timely payment to vendors and introduce attractive incentive-based scrappage policy to revive the M&HCV segment,” added Gulati.

The dealer fraternity body says with the festive season now over, heavy rains in certain parts of the country leading to crop damage and pent-up demand almost negligible, demand revival now solely depends on exciting year-end schemes. If the supply chain issues in the PV segment is controlled, the industry may see continued growth in December.

FADA has once again cautioned two-wheeler OEMs and dealers to keep a check on vehicle inventory as post festivals, demand may remain subdued.

According to Gulati, "We are confident about passenger vehicles sustaining the demand, but not so for the two-wheelers. This is simply because people want to travel safely with their families which is the top priority at the moment."

"Also, with work-from-home and school-from-home remaining prevalent for the near term, demand for individual mobility products such as two-wheelers is going to be weak," Gulati added.