With India going into an unlock mode, the Federation of Automobile Dealers Association of India (Fada) envisages significant growth in auto sales during the festive months of October and November.

 

The association, however, warns against the risk of COVID-19 spreading more during the festive season, which along with the upcoming elections could bring disappointment in some regions.

 

The government initiative to waive off interest during the moratorium period by a maximum of Rs20mn could instill positive sentiment in the market. Consumers could thus make a vehicle purchase decision in the coming days.

 

Passenger vehicles and two-wheeler segments are likely to lead the way. Auto sales are expected to reach the prior-year level as banks and Non-Banking Financial Companies (NBFC) plan to offer attractive schemes to the customers.

 

In September 2020, vehicle registration dropped by 10.24pc to 1,344,866 units from 1,498,283 units in Sept 2019. Of this, two-wheeler and three-wheeler registrations dropped by 12.62pc and 58.86pc to 1,016,977 units and 24,060 units, respectively, compared to the prior-year month.

 

The number of commercial vehicles registered declined by 33.65pc to 39,600 units from 59,683 units in the prior-year period.

Passenger vehicle and tractor registrations, however, rose by 9.81pc and 80.39pc to 195,665 units and 68,564 units, respectively, from 178,189 units and 38,008 units in the period.

 

The rise in sales of passenger vehicles was driven by a government push to normalize business conditions, and banks became considerate enough to finance vehicles, according to Fada’s President Vinkesh Gulati. In rural areas, tractor sales continued to rise with the government aiding the agriculture sector in the Kharif season. A good Rabi season this year, also helped lift sales of two-wheeler, small passenger vehicles, and small commercial vehicles. Sales for all the categories, however, are yet to reach pre-COVID-19 levels.

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