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Auto retail sales drop 55 per cent in May as Covid hits registration

AUTOMOBILE retail sales in India dropped 55 per cent in May compared to April as vehicle registrations were hit due to lockdowns in various states, the Federation of Automobile Dealers Association (FADA) said on Thursday (10).

Sales in all segments were hit last month as most showrooms remained closed as per the government orders to control the spread of Covid-19.


Total registrations across categories in May dropped to 535,855 units as compared to 1,185,374 units in April this year.

Passenger vehicle sales declined 59 per cent in May as compared to 208,883 units in April this year, FADA said.

Two-wheeler sales also dropped 53 per cent to 410,757 units last month, as against 865,134 units in April.

Similarly, commercial vehicle sales fell 66 per cent to 17,534 units in May, as against 51,436 units in April.

“The second wave of Covid has left the entire country devastated as there may not be a single household which did not get affected. Apart from urban markets, this time, even rural areas were badly hit. May saw continued lockdown in most of the states,” FADA president Vinkesh Gulati said.

Gulati also asked the government to allow a moratorium of 90 days to all categories of dealers without keeping a turnover limit.

“This is required as auto retail trade works on the principle where dealers get funded from financial institutions in terms of inventory funding for a period of 30-45 days to purchase vehicles from auto OEMs (original equipment manufacturers),” Gulati added.

A few OEMs - Tata Motors, Renault, Bharat Benz and HMSI - have announced financial help to their channel partners.

FADA requested all other OEMs to give financial assistance to retailers.

The automobile body remained guarded in its optimism on overall industry recovery in the current fiscal due to pandemic.

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