Nirmal Bang: August 2020 Auto Sales Sees Improvement In Vehicle Registrations Aided By Festive Demand And Unlock

Nirmal Bang Report

The Federation of Automobile Dealers Associations (FADA) released monthly vehicle registration data for August 2020.

Below are the key takeaways:

Vehicle registrations for August 2020 showed sequential improvement on account of increase in mobility needs due to continued unlocking of India and higher festive demand (as highlighted in our dealer checks).

However, vehicle registrations continued to remain low on YoY basis for all the segments, barring Tractors.

Commercial vehicles and three-wheelers continued to remain the worst affected segments, with 57.4% YoY and 69.5% YoY decline, respectively.

Commercial vehicles, especially medium and heavy commercial vehicles are still suffering from higher lead times with financers, stricter CIBIL checks (affecting customer finance) and an increase in cost of acquisition (leading to viability issues).

Passenger vehicles arrested YoY decline to single digit (7.1% YoY) on account of higher demand for entry level passenger vehicles amid shift in preference towards personal mobility.

Tractors, small commercial vehicles and entry level passenger car registrations continued to remain strong amid rural revival on the back of higher government spends, good monsoon and healthy kharif sowing season.

However, two-wheeler registrations witnessed only a marginal improvement sequentially (2.8% month on month).

We believe that the buzz of goods and sercive tax reduction on two-wheelers would have likely affected sales in the last week of August.

Click on the attachment to read the full report:

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