India is facing one of its most difficult times at the moment, with the second wave of COVID-19 wreaking havoc in everyone’s life.
The second wave of COVID-19 which is currently widespread across the country has severely affected the domestic automobile industry. In April 2019, there has been a decline of about 32 percent in the registration of automobiles in April 2021 as compared to two years ago. Due to the lockdown, dealers in different states are currently unable to run their business. The sales volume has not been comparable since April 2020 as there was a lockdown across the country during that time and no vehicles were registered.
Every segment of the industry registered a huge decline in sales. However, tractors are not being added to it as their growth is quite good. Passenger vehicle registrations were down 14 percent, two-wheelers more than 31 percent, three-wheelers 64 percent and commercial vehicles 49 percent in April 2020. Tractors registered an increase of over 16 percent.
What does the FADA say
India is facing one of its most difficult times at the moment, with the second wave of COVID-19 wreaking havoc in everyone’s life. President of the Federation of Automobile Dealers Association (FADA), Vinkesh Gulati said that this time, the spread is not limited to urban markets only, but it has also taken rural India into its grasp.
He further said that, unlike last year, this time not the central government but the state governments have announced the lockdown. No relief has been announced by RBI and Auto OEM. Let me tell you that even if the comparison is being done from March to April, the effect of the lockdown is clearly visible.
There is a steady decline in registration
Explain that there is a 28 percent decrease in registration as most of the Indian states started declaring the lockdown at the beginning of the month (partially complete on 5 April). The spread started in Maharashtra, followed by Chhattisgarh, Delhi and Rajasthan.
Soon after, other states also followed it. In all categories, two-wheelers registered a decline of 28 percent, three-wheelers 43 percent, passenger vehicles 25 percent, tractors 45 percent and commercial vehicles 24 percent.
Hope from government
Worse is that, FADA does not have much hope from May. With lockdown in most states, dealerships and even factories have closed. The FADA has sought a financial package from the government and has also requested the Reserve Bank of India for directions or notification regarding exemption of loan repayment equal to the number of days of lockdown in each state.
Gulati further said that, this time the second wave of COVID has destabilized not only urban but also rural markets. In this case, the second wave may take longer to recover than the first wave. In such a situation, the only ray of hope will come at the time of monsoon, which is likely to enter India from the south coast around 1 June. Because during that time the output of fields will be high. In such a situation, the rural market will rise faster than the urban market.
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