Retail Auto Sales Seen Plunging In April On Covid Resurgence: BQ Survey

Car and two-wheeler dealers saw one of the steepest declines in retail sales in April as a renewed surge in coronavirus cases lead to fresh curbs across the country, according to a BloombergQuint survey of 10 dealers.“In four-wheelers, the demand is down 25-30% month-on-month, but in two-wheelers, the demand has plunged 50-60% (month-on-month) wherever the dealerships are open,” Vinkesh Gulati, president of Federation of Automobile Dealers Association, told BloombergQuint over the phone.Year-on-year data isn’t comparable since this time last year India had announced a complete nationwide lockdown, stalling production and washing out sales.Now, as India again reports a record spike in Covid-19 infections and deaths daily, auto dealers are witnessing a slowdown. The surge has already prompted states such as Maharashtra, Delhi, Rajasthan, Madhya Pradesh and Karnataka to announce stringent restrictions or partial lockdowns in April, leading to low footfalls at dealerships..Gulati estimates that at least 7,000 dealerships closed due to these fresh lockdowns..The second wave of the virus halted a nascent recovery in automakers that were grappling with the worst slowdown in more than two decades before the pandemic. Up until March, sales recovered aided by a pick-up in economic activities after India eased the nationwide stay-at-home curbs, demand for personal mobility and festive push despite supply-side constraints..The Hottest New Launches Lined Up In The Year Of SUVs.The Inventory Angle.For two-wheelers, however, the higher cost of ownership due to costly fuel and price hikes to counter commodity inflation outweighed the uptick in sales led by an increase in rural demand on account of good monsoon, bumper crops and government’s spending to boost the economy. That caused an inventory pile-up.Four-wheelers, according to dealers, fared better as a global shortage of semi-conductors slowed production, lowering inventory, evident from long waiting periods for such vehicles.The only saving grace for us is we are sitting at low stock, and already have a pipeline of pending orders, a Bengaluru-based dealer for Hyundai, Honda and Ford told BloombergQuint over the phone. April is going to be a slow month for sales. Last 10 days we have had virtually no business, he said on the condition of anonymity out of business concerns.A Gujarat-based dealer for Tata Motors Ltd. expects sales to remain flat over March, and is worried over how things will pan out going ahead.While the average inventory period for cars was around a month or less, it was twice that level for two-wheelers, the dealers said.“March was a good month, but [sales in] April is almost 50% down over the previous month,” Pradeep Agarwal, managing partner at JMG Automobiles, which runs an authorised dealership of Hero MotoCorp Ltd. in Cuttack, said. To ease the burden on dealers and manage the supply chain, the nation’s largest two-wheeler maker announced a four-day shutdown across its manufacturing facilities in a staggered manner from April 22 to May 1.A Honda Motorcycle and Scooter dealer in Kolkata also expects sales in April to fall by half over the preceding month due to lower footfalls. The slowdown led to an inventory period of 50 days.The situation isn’t any different for two-wheeler dealers in Uttar Pradesh, Rajasthan, and Gujarat.“Already the two-wheeler segment was struggling to revive from the first wave. Now with the second wave impact, they are de-growing further and is creating a big problem for the two-wheeler market,” FADA’s Gulati said..Rajiv Bajaj On Overtaking Hero MotoCorp

Retail Auto Sales Seen Plunging In April On Covid Resurgence: BQ Survey

Here’s what BloombergQuint’s survey of 10 dealers reveals about auto sales in April…

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