May 2020 vehicle registrations in India down by 89 percent

On a Year-on-Year (YoY) basis, vehicle registrations in May 2020 witnessed combined degrowth of about 89%, with three-wheeler & commercial vehicle segments being the worst hit.

The Federation of Automobile Dealers Associations (FADA) has released the vehicle registration data of India for May 2020 and the numbers, when compared on a YoY basis, are quite discouraging (it should be noted that FADA's data consists of figures only of those states/UTs that are on VAHAN). Compared to 18,21,650 vehicles registered across the country in May 2019, only 2,02,697 vehicles were registered in May 2020. This translates into a YoY fall of nearly 89%. On the flipside, with lockdown restrictions eased out in May and some dealerships resuming operations, the numbers are comparatively better than those of April 2020.

Out of the 2,02,697 vehicles, 1,59,039 were two-wheelers, 1,881 three-wheelers, 2,711 commercial vehicles 30,749 passenger vehicles and 8,317 TRAC vehicles.Out of these segments, the three-wheeler & commercial vehicle segments have been worst hit, with degrowth of about 96% each. The two-wheeler & passenger vehicle segments followed at 88.8% and 86.97% degrowth, respectively. 

The first few days of June also witnessed a tepid consumer response, especially in urban regions, due to worries of ever-growing COVID-19 cases in the country. As a result, FADA estimates that June is still likely to register degrowth of almost 25%, despite most dealerships & sales outlets back on track. However, hardships faced by the automotive industry in rural areas is likely to be less (when compared to the urban regions) due to positive monsoon projections and numerous government interventions.

The overall weak sentiment though will take a toll on the dealer community as 2020 could be one of the most difficult years for it. As per the Society Of Indian Automobile Manufacturers (SIAM), the dealership community could see further annual degrowth of about 35% (on top of last year's 18% degrowth), as volumes are likely to fall by half in a span 20 months.

The figures from FADA for May 2020, however, do not represent the most accurate idea of buyer sentiment across the country for two reasons. One, despite numerous dealerships resuming operations in May, quite a few regions in India were still under lockdown. Second, these figures are of vehicle registrations and not direct sales figures. With Regional Transport Offices (RTOs) also shut for a significant number of days, many new vehicle buyers did not get a chance to get them registered. 

Therefore, figures from the following months are likely to give a clearer idea of buyer sentiment across the country.

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