Retail Tractor Sales Signal Collapse In Rural Demand In May

Retail auto sales fell by half over the previous month in May as local lockdowns to contain a deadlier second surge of Covid-19 kept dealerships shut in cities and rural demand tumbled as the virus ravaged India's hinterland.Vehicle registrations—a measure of sales at dealerships—fell 55% over the preceding month to 5.36 lakh units in May, according to data from 1,493 regional transport offices in 33 states and union territories. BloombergQuint collated the numbers from the website of the Ministry of Road Transport and Highways.Large states such as Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh imposed strict local curbs after the Covid-19 virus' new mutants spread faster, overwhelming hospitals with more cases and causing higher fatalities because of oxygen shortage. These states account for nearly half of the demand for cars to scooters. While restrictions continue, the states have started gradually easing them in June.Factory-gate shipments also tumbled in May as it became difficult to push down inventory during local restrictions, prompting suspension in production. India’s largest carmaker, Maruti Suzuki India Ltd., saw a 71% month-on-month decline in wholesales compared with a 62% fall in retail sales.The decline in retail sales this time, however, was not as severe as last year's national lockdown that caused a near-complete washout in the first two months. In fact, vehicle registrations in May were higher than a year earlier. But the virus did stall a nascent recovery..Monthly sales at dealerships for tractors, two-wheelers and passenger cars were the lowest since June last year. The commercial vehicle segment fared a little better..Tractor sales, among the first category to rebound last year, saw registrations dip for the second straight month in May, indicating demand tumbling in rural areas and tier-II markets. Sales, however, remained higher than May 2020 for most manufacturers except TAFE Ltd..Makers of passenger cars tracked by BloombergQuint saw their sales slip 60% in May. Many of the companies halted production and dealerships remained closed down during local lockdowns..Among two-wheeler makers, Hero Motocorp Ltd. saw its sales dip 35.6% sequentially. Retail sales for most of its peers fell by half as higher prices and costlier fuel has only aggravated the pandemic-induced slump..While the commercial vehicle makers have seen a recovery in the last few months with volumes inching back to pre-pandemic levels, local curbs did bring down retail sales sequentially. They, however, remained higher than a year earlier.

Retail Tractor Sales Signal Collapse In Rural Demand In May

Vehicle registration halved in May compared to a month ago led by lockdowns across the country. Read to know more.

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