India’s automobile industry is staring at a negative growth of 15-35pc in sales in FY2021, according to the latest data released by the Federation of Automobile Dealers Associations (FADA) on July 21.
While’s its annual outlook was in the negative, the auto body said the outlook for July would be better than June’s, when vehicle registrations tumbled by 42pc. Though it is likely to pick up pace during the festival season.
The report said that India’s auto demand has faced a major setback owing to supply constraints and restrictions in retail lending from Non Banking Financial Companies (NBFC). The demand is anticipated to settle in the future if COVID-19 lockdown restrictions are eased and production commences.
Meanwhile, rural markets in India have registered growth as tractor sales rose by 10pc to 45,358 units in June from same period last year. The arrival of monsoons has led to good harvests and rural markets have witnessed a surge in sales. The auto body indicated that sale sale of two-wheelers and small commercial vehicles in rural area was also positive.
In June, two-wheeler sales slipped by 40.92pc to 790,118 units compared to prior year period, while three-wheeler sales dipped by 75.43pc to 11,993 units.
The total sale volumes fell by 42pc to 984,395 units as compared to 1697,166 units in the prior-year period due to COVID-19 related disruption.
The president of FADA, Ashish Harsharaj Kale, cited that the hike in COVID-19 cases has severely affected consumer demand. He also appealed to the government for the introduction of an incentive-based vehicle scrappage policy in order to increase commercial vehicle sales.