July 2020 automotive retail sales still 36 per cent less YoY
The latest data released by FADA (Federation of Automobile Dealers Associations) for July 2020 suggests that the auto industry still has some way to go to make a full recovery. While data from OEMs say that auto sales are almost at pre COVID19 levels, retail sales in July 2020 were still 36.27 per cent less than last year.
But there are positives. In June 2020, sales were down 42 per cent from last year and FADA expects this gap to reduce further. In fact, the passenger vehicle segment seems to be en route to recovery quicker than other segments. Sales were down 25.19 per cent over last year. This is a win given the two-wheeler segment has fallen short by 37.47 per cent. FADA warns though, that these numbers may not still be a correct representation of the market. The body is hopeful that with some major festivals coming up in August, there will be greater recovery. The outlook for the full year is that sales will be 15 to 35 per cent less than last year.
Aside from the spending crunch among buyers due to the pandemic, another reason why growth hasn't been as quick as is due to the cautious approach that banks and NBFCs have taken to funding the automotive buyers. These financial institutions have tide over the early liquidity crunch but now seem unsure of a steady income among those applying for a loan to buy a vehicle. Funding amounts have dropped by 10 to 15 per cent according to FADA
The rural market, significantly less affected by the pandemic, has been the growth driver this month again, further helped by a good monsoon. Tractor sales are still the only ones to show positive growth, at 37.24 per cent growth this month. The three-wheeler and commercial vehicle segments continue to be the worst hits with sales still 74.22 per cent and 72.18 per cent less than last year.
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