Auto companies suffer 20% decline in bookings amid rising cases

Sales of cars, two-wheelers and commercial vehicles are expected to take a hit this month due to the sharp rise in Covid-19 cases and the consequent spate of localised lockdowns imposed across the country.

Several automobile dealers told ET that walk-ins and fresh bookings across the country have fallen by 20% in the past two weeks compared with the same period in 2019. Automakers had registered zero sales due to the imposition of the Covid-induced nationwide lockdown in the country in April 2020. There is no sale in Maharashtra – which accounts for 10% of all automobiles sold in the country – due to a partial shutdown till month end.

“In pockets where there are partial lockdowns, footfalls and fresh bookings are negligible,” said Vinkesh Gulati, president of Federation of Automobile Dealers Association. “In cities, where cases are rising, demand has waned as consumers are not moving out. Last year, we received a lot of interest from customers via digital platforms during localised lockdowns, but this year that is missing,” he said.

Given the weak consumer sentiments, vehicle sales this month is expected to be less than last month despite festivals such as Navratri. Vehicle registrations – a proxy for retail – declined by 29% to 1.65 million units last month, shows data compiled by Fada from the portal of national vehicle registry Vahan. Vehicle registrations last month, however, had grown 10% over February.

“April is looking grim,” said Nikunj Sanghi, managing director at JS Fourwheel Motors. “Two-wheeler sales had anyways slowed the past few months. Even in the passenger vehicle segment, footfalls have dropped. But the decline will not be noticeable because of supply constraints the segment has been witnessing due to shortage of semi-conductors and raw materials.”

Inventory in the passenger vehicle segment stands between 10-15 days, compared to industry norm of 3-4 weeks.

“Retail sales are sure to get impacted adversely in the short term due to the surge in cases and the fresh restrictions being imposed by local administrations to check the spread,” a senior industry executive said on condition of anonymity.