FADA Releases June’20 Vehicle Registration Data

The Federation of Automobile Dealers Associations (FADA) today released the Monthly Vehicle Registration Data for the Month of June’20.

Highlights:

• Vehicle Registration for June tumbles by -42% as the Indian Economy continues to battle with Covid-19.
• On a YoY basis, 2-Wheeler degrows by -40.92%, 3-Wheeler by -75.43%, CV by -83.83%, and PV by -38.34%. Tractors registrations continue to march ahead with June numbers showing a growth of 10.86%.
• Ease in Nationwide lockdown (Unlock 1.0) has boosted the number of vehicles registered compared to May last month.
• Robust Demand recovery observed in rural market leading to rise in sales volume of tractors, followed by 2W, small commercial vehicles. However, M&HCV and PV sales particularly in Urban pockets play laggards as Lockdown persists in many Cities.
• Demand boosters from the Government can ensure speedier Auto demand revival. Attractive vehicle scrappage policy is one of the dire needs for revival of CV market.

June’20 Retail Sales

Commenting on how June’20 performed, FADA President, Mr Ashish Harsharaj Kale said, “Unlock 1.0 coupled with increase in demand from the rural market has boosted the retail sales with respect to the May month’s numbers.

At the end of June, Almost 100% dealership outlets (showroom and workshops) were operational across the country, barring a few cities and towns which have once again implemented stringent Lockdown.

June registrations, although better than May is still not Indicative of the actual demand situation as Lockdown woes continue in some parts and supply side is far from its complete potential.

Overall weak economic sentiments coupled with rising number of Covid-19 patients has led to weak consumer confidence especially in Tier – 1 cities, as customers stopover from concluding their purchase as fear of community spread and therefore a return of complete lockdown persists

Rural market lead by a robust crop situation of previous harvest and timely arrival of monsoons has witnessed demand recovery in comparison to urban areas, therefore leading surge in retail sales of tractors as well as positively impacting 2W and Small Commercial Vehicles.

The Positive Rural Sentiment if backed with demand boosting measures by the Government can ensure the quickest return to normalcy of the Auto Industry, amongst all Core Industries, thereby impacting the Overall Consumer Sentiment Positively.

FADA would once again urge Our Government for urgent introduction of Attractive Incentive based Vehicle Scrappage Policy which today is one of the dire needs for the revival of the Commercial Vehicle Sector and especially M&HCV’s, as the sector faces major headwinds in demand revival.”

Outlook for July

With an assumption of no further lockdown and continued reopening measures, it is anticipated that Vehicle Registrations will see somewhat similar trends and mostly will better the June numbers, with further green shoots of demand in newer geographies and segments.

Overall Auto demand  though continues to be a challenge coupled with supply side constraints as well Constraints in Retail Lending from NBFC’s, normalcy in demand still seems quite distant and not before the festive season.

Despite the positive trends in the rural markets, the Annual Outlook currently continues to be grim with projected sales to witness a de-growth range of 15% - 35% across various segments in FY21, except for the Tractor segment, which looks set to clock a positive annual growth.

Chart showing Vehicle Registration Data for June’20 with YoY comparison can be found below:

Vehicle Registration Data for June’20

CATEGORY	JUNE'20	JUNE'19	YoY %
2W	7,90,118	13,37,462	-40.92%
3W	11,993	48,804	-75.43%
CV	10,509	64,976	-83.83%
PV	1,26,417	2,05,011	-38.34%
TRAC	45,358	40,913	10.86%
Total	9,84,395	16,97,166	-42.00%

Source: FADA Research

Disclaimer:

1. The above numbers do not have figures from AP, AN, MP, LD & TS as all these States/UT’s are not yet on Vahan 4.
2. Online Survey has a limited sample size and reflects an overall trend.
3. Vehicle Registration Data has been collated as on 13.07.20 and in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,230 out of 1,440 RTOs.

State-wise Vehicle Registration Analysis can be found in Annexure 1, Page No. 04.

FADA Releases May’20 Vehicle Registration Data

1^th June’ 20, New Delhi: The Federation of Automobile Dealers Associations (FADA) today released the Monthly Vehicle Registration Data for the Month of May’20.

May’20 Retail Sales

Commenting on how May’20 performed, FADA President, Mr Ashish Harsharaj Kale said, “For the first time in history, the month of April witnessed Zero Retails. While lockdown was gradually relaxed beginning May, Auto Dealerships and workshops opened for the first time after 40 days in many cities.

At the end of May, out of 26,500 outlets about 60% showrooms and 80% workshops were operational across the country.

May registrations are hence not indicative of the demand situation as the Lockdown still continued in many parts.

First 10 days of June witnesses extremely low demand despite most dealerships which are now open for business. Weak consumer confidence especially in urban areas continue to haunt as customers stay away from concluding their purchase due to threat of community spread and return of complete lockdown persists

With 7.6% of GDP, a workforce of several millions and a multiplier effect for many supporting sectors, Auto Industry can be the driving force in boosting consumer confidence and improving sentiment, if supported with short term stimulus to revive demand as return to normalcy seems very difficult till the festive season.

Mobility still being a necessity and not luxury in a growing country like ours, demand stimulus along with credit support can bring Auto Sales back in positive zone within 30-60 days and help shore up consumer confidence.”

Outlook for June

With an assumption of no further lockdown and continued reopening measures, there will be substantial pick up in Auto Retails in comparison to May, but the overall outlook continues to be grim with projected sales to witness a de-growth upwards of 25% YoY.

Urban Demand will continue to face challenges ahead with Covid-19 uncertainty. On the flipside, the Government’s push for Infrastructure spending and the recent positive measures announced for Agriculture sector will help support rural demand. It will further strengthen with the normal spread of monsoon which will help Tier 2 and 3 Dealers face lesser de-growth compared to their urban colleagues.

Dealer Sentiment

A projected annual de-growth of 35% by SIAM on top of the 18% de-growth faced last year, the Dealership Community faces its toughest years ever as volumes are estimated to half in a span of 20 months.

With no direct support as business community, except for the moratorium extension given to all businesses, the Dealership Community looks forward to an early recognition as an MSME to avail Government support for the survival and for its 40 lakh workforce.

With cost cutting having its limitations due to the nature of the Business, FADA is strongly pursuing with all our Principals to correct the long pending anomaly of low sales margin and revise it upwards to 7% to get it at par at least at the lower band of global dealer margin which ranges from 7%-14%.

Lakhs of jobs and hundreds of dealers survival is at stake if demand de-growth predictions hold true and operating economics remain unchanged. FADA will strongly continue the campaign for higher business margins for survival of its members in these uncertain times as it will also help us in self sustenance as many more disruptions will come in future in a globally connected world.

Inventory

Due to the Lockdown situation, Inventory analysis with regards to current retail will not depict a realistic scenario and hence will be resumed from June onwards.

Charts showing Vehicle Registration Data for February’20 with YoY comparison can be found below:

Vehicle Registration Data for May’20

CATEGORY	MAY'20	MAY'19	YoY %
2W	1,59,039	14,19,842	-88.80%
3W	1,881	51,430	-96.34%
CV	2,711	80,392	-96.63%
PV	30,749	2,35,933	-86.97%
TRAC	8,317	34,053	-75.58%
Total	2,02,697	18,21,650	-88.87%

Source: FADA Research

Disclaimer:

1. The above numbers do not have figures from AP, AN, MP, LD & TS as all these States/UT’s are not yet on Vahan 4.
2. Online Survey has a limited sample size and reflects an overall trend.
3. Vehicle Registration Data has been collated as on 08.06.20 and in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,225 out of 1,435 RTOs.

State-wise Vehicle Registration Analysis can be found in Annexure 1, Page No. 04.

FADA releases January’20 Vehicle Registration Data

20^th February’20, New Delhi: The Federation of Automobile Dealers Associations (FADA) today released the Monthly Vehicle Registration Data for the Month of January’20.

January-20 Retail Sales

Commenting on how January’20 performed, FADA President, Mr Ashish Harsharaj Kale said, “Auto sales continue to be in the negative territory in the month of January, except for 3W, with many consumers still not concluding on their decisions. Ongoing Transition of BS-IV to BS-VI is also a factor in delayed purchase decision.

Overall Weak Economic sentiment continues and even the Budget 2020, although an inclusive budget with growth drivers for the mid to long term, did not have any direct measures nor any immediate growth Spurring initiatives for the Auto Sector.

For the first time FADA has given Registration Figures for the Tractor Segment, thereby covering the entire mobility spectrum. Tractor numbers will also give a brief insight into Rural Demand Situation.

FADA’s Appeal in SC for Extension of Sale beyond 31st of March for Dealer stock was not Considered by the Hon’ble Court. With the Weak Demand Situation, Liquidation of Complete BS-IV Inventory is the Top Focus for Us and FADA has already appealed to all OEM’s to Switch Over Completely to BS6 Despatches to Dealers.

The last 14 months has seen the one of its toughest times in auto sales. FADA has therefore requested our OEM’s through SIAM that any BS-IV Vehicle Billed further which are not against specific customer orders, to be on returnable basis to avoid financial loss to Our Members.

FADA will also Co-ordinate with Banks and NBFC’s to Ensure Financing of BS-IV Inventory till the SC mandated date of 31st of March to ensure Liquidation of the BS4 Stocks and Smooth Transition to BS6 without any Financial Implication to any stake holder.

With Continued weak consumer sentiment and the overall economic situation, as well as the Upcoming BS-VI Transition, the near-term Demand situation will continue to be dynamic. We appeal to the Government to continue announcing positive measure, specifically for the Auto Industry, as well as for the Overall Economy which will help us return to growth Trajectory at the earliest.”

Key Findings from our Online Members Survey

• Sentiments
• 54% Dealers rated it Neutral (54% in December’19)
• 25% Dealers rated it Bad (25% in December’19)
• 21% Dealers rated it as Good (20% in December’19)

• Liquidity

o   53% Dealers rated it Neutral (50% in December’19)

o   25% Dealers rated it Good (25% in December’19)

o   22% Dealers rated it as Bad (25% in December’19)

• Expectation in February’20

o   38% Dealers rated it Flat

o   34% Dealers rated it De-Growth

o   28% Dealers rated it Growth

• Inventory

o   Average inventory for PVs ranges from 15 – 20 days (20 – 25 days in December’19)

o   Average inventory for 2W ranges from 25 – 30 days (30 – 35 days in December’19)

o   Average inventory for CV ranges from 25 – 30 days (30 – 35 days in December’19)

Charts showing Vehicle Registration Data for January’20 with YoY comparison can be found below:

Vehicle Registration Data for January’20

CATEGORY	JAN'20	JAN'19	YoY %
2W	12,67,366	13,89,951	-8.82%
3W	63,514	58,178	9.17%
CV	82,187	88,271	-6.89%
PV	2,90,879	3,04,929	-4.61%
TRAC	46,170	43,924	5.11%
Total	17,50,116	18,85,253	-7.17%

Source: FADA Research

Disclaimer:

1. The above numbers do not have figures from AP, AN, MP, LD & TS as all these States/UT’s are not yet on Vahan 4.
2. For the first time, Tractors (TRAC) has been included as a new category.
3. Since Dec’19, National Comparative figures are including Kerala.
4. Online Survey has a limited sample size and reflects an overall trend.
5. Vehicle Registration Data has been collated as on 14.02.20 and in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,223 out of 1,432 RTOs.

FADA requests intervention of PMO and Allied Ministries on UM Lohia’s exit from India

3^rd December’19, New Delhi: The Federation of Automobile Dealers Associations (FADA) which had taken up the cause of the dealers of ‘UM Motorcycles’, whose motorcycles were manufactured and sold in India by UM Lohia Two Wheelers Pvt. Ltd (UM Lohia) has now requested Prime Minister’s Office and Allied Ministries viz. Heavy Industries, Road Transport & Highways, Commerce & Industry and Corporate Affairs Ministries to intervene in this matter.

Earlier, FADA, through its counsel Khaitan & Co, had issued a legal notice to UM Lohia and its management, calling upon them to redress all grievances of dealers and to take steps to ensure the maintenance and servicing of motorcycles already sold in accordance with the warranty terms and law.

Having received no satisfactory response from the Company as well as its owners, FADA now has requested the Prime Minister’s Office, Ministry of Heavy Industry & Public Enterprises, Ministry of Road Transport & Highways and Corporate Affairs Ministry calling upon the Government to urgently intervene in the matter.

The said incidence is now the 3^rd one after General Motors and Man Trucks sudden exit from the country.

Auto Manufacturer’s shutting shops and exiting India overnight now brings a strong urge to introduce Franchisee Protection Act in the Country to safeguard the interest of the Customers, Dealers & Employees since India aspires to make our Country a Manufacturing hub with the aim of Make in India.

Fact sheet below illustrates loss suffered by Customers, Dealers and Employees who stand to lose their jobs as a result of sudden cease of operations by UM Lohia is mentioned below:

KEY FACTSHEET FOR UM MOTORCYCLES
UM & Lohia Auto Pvt. Ltd. JV Incorporated in the year	2015
First dealership registered	2016
Stopped Production	Oct-18
Total number of UML Dealership	80 Dealerships
Total Capital loss across 80 Dealerships	Rs. 150 Crore
Direct Job losses across 80 Dealerships	Over 2,500
Total Customer base	Over 10,000
Product price Range	Rs, 1,75,000

UM Lohia is a joint venture between the Lohia Group and UM Motorcycles, an American motorcycle company. The joint venture was set up in 2016 to manufacture and sell in India ‘American’ style motorcycles under the brand of ‘UM Motorcycles’.

Looking at the plight of the Customers who are not getting proper service and spares because of carelessness of the owners and the Dealers who are aggrieved by the dishonesty and fraud on part of the management and promoters of UM Lohia, including founders Mr. Ayush Kumar Lohia and Mr. Jose Miguel Villegas, FADA has taken up this issue and is requesting intervention of the PMO and Allied Ministries.

Due to the plagued relationship between the owners, it has caused huge losses to dealers and has exposed them to unwarranted litigation from customers for whom, Dealers are the face of the company. Apart from the Business Losses which the dealers are facing with, it has also resulted in creating a bad name in their society and has therefore added to their plight and mental harassment.

FADA would want to solve this issue amicably as it has done in previous two cases of OEM’s exiting India. But failing to get any response from UML, there may be no other alternative but to take the final recourse including civil and criminal proceedings.

FADA writes to SIAM to upgrade to Market Share Calculation by way of Vahan Registrations

12^th September 2019, New Delhi: The Federation of Automobile Dealers Associations (FADA), the apex national body of Automobile Retail, yesterday wrote to SIAM to upgrade Auto OEM’s market share calculations on basis of actual registrations which is found in Ministry of Road Transport & Highway’s Vahan Platform.

A letter written by FADA President Mr Ashish Harsharaj Kale to SIAM President Mr Rajan Wadhera requesting him to initiate this much needed reform is attached with this release.

It should be noted that during FADA’s 2^nd Auto Retail Conclave, Mr. Kale in his inaugural speech had requested Mr Wadhera that Auto OEMs should upgrade to actual registrations instead of wholesale dispatches to calculate market share which is a worldwide norm and also a strong need of the Dealer Community.

This sentiment was also voiced by many other Senior Industry Captains at both SIAM as well as ACMA events as reporting retail registration numbers will help all the Stake Holders of the Industry in efficient Inventory Management and keep us better prepared in these Dynamic Times.