Vehicle registrations with regional transport offices (RTO) were down 3% to 1,619,181 in March, led by a dip in sales of two-wheelers, passenger vehicles and tractors. Automakers in India do not disclose retail sales numbers and hence registration numbers are used as a proxy.
“The two-wheeler segment which was already a non-performer due to rural distress, saw further dampening due to rise in vehicle ownership cost coupled with rising fuel cost,” said Vinkesh Gulati, president of the Federation of Automobile Dealers’ Associations (FADA), a lobby for vehicle retailers.
Two-wheeler registrations in the month under review fell 4.02% to 1,157,681 units. Acquisition cost of two-wheelers has gone up by more than 20% in the past couple of years, denting demand.
Even as demand remained strong in the passenger vehicle segment, the global shortage of semi-conductors continued to impact supplies. Passenger vehicle registrations last month declined 4.87% to 271,358 units. Gulati cautioned the Russian invasion of Ukraine and covid-induced lockdowns in China may further disrupt supplies, lengthening waiting period for car buyers.
The data was put together by FADA from the VAHAN platform of the Ministry of Road Transport and Highways (MoRTH). VAHAN captures data from 1,391 out of 1,600 RTOs in the country.
In the commercial vehicle segment, demand for three-wheelers and trucks and buses saw a sharp uptick. With schools and offices opening up, demand for three-wheelers rose 26.61% to 48,284 units in March. Meanwhile, sales of commercial vehicles grew 14.91% to 77,938 units. “CVs continue to inch forward even though full recovery from FY’20 perspective is still away. Sentiment for the segment remain positive as Government’s infra push coupled with replacement demand is driving sales,” said Gulati.
For the entire financial year, automobile registrations increased 7%, said FADA. Demand grew across segments, albeit on a low base, except for tractors.
Near-term, Gulati said challenges will persist for stakeholders in the local automobile industry. The Russia-Ukraine conflict and lockdowns in China are expected to disrupt supplies. Additionally, the sharp rise in fuel prices is expected to dampen demand. “Crude is on a boil and hence fuel prices have been raised by around Rs 10. This will continue to rise and further hit sentiments, lowering spending. Along with this, increase in raw material costs have made OEMs increase the prices of their vehicles. While no dent in terms of demand has been seen in PV segment, it will definitely have its impact on 2W segment which is an extremely price sensitive market”, said he.
On the positive side, with Gudi Padwa, marriage season and re-opening of educational institutions & offices, some pent up demand is expected to come in especially in the two-wheeler segment. FADA expects the local automobile industry to reach pre-pandemic levels in the next financial year (FY24).
