Sale of passenger vehicles, 2 wheelers rising during festive season: Ind-Ra report

New Delhi: Amid increasing consumer preference for personal mobility, the original equipment manufacturers have continued with higher wholesale billings during July-September 2020, ahead of the peak demand period during the festive season in October-November, with passenger vehicles (PVs) and two-wheeler (2W) segments continuing to lead the growth, stated a report by the India Ratings and Research.

Consequently, sales volumes in the second quarter (July-September) of FY21 recovered to 99 percent of the corresponding period in FY20 levels. The sales volume of PVs and 2Ws were up 26 per cent and 12 per cent, on a year-on-year basis, respectively, in September 2020.

As per the report, increased wholesale billings during August-September have helped PV and 2W sales volumes for the second quarter of FY21 to recover to 117 and 100 per cent, respectively, of the 2QFY20 levels.

However, three-wheelers and commercial vehicles continue to fall behind considerably, with 2Q FY21 sales volumes at 25 per cent and 80 per cent, respectively, of the 2Q FY20 levels. The sale of three-wheelers has been impacted the most as demand has been stifled by consumer preference to keep away from using public transport, the report said.

“The domestic automobile industry reported a 40 per cent YoY decline in sales volume in the first half of FY21 with a 34 per cent, 56 per cent, and 38 per cent YoY decline in PV, CV, and 2W sales volume, respectively. After plunging 75 per cent YoY in the first quarter of FY21 amid COVID-19 led disruptions, the domestic automobile industry saw a sequential uptick in demand in the second quarter, mainly led by strong demand from the rural markets while most urban areas remained more impacted by the pandemic,” the report said.

Meanwhile, as per the demand of CVs, the report said it is yet to reach the levels of PVs and 2Ws, as the demand for these, “especially for medium and heavy commercial vehicles, continues to be impacted by the ongoing overall slowdown in economic activity coupled with the excess available capacity in the system. During the 2nd quarter of FY21, medium and heavy commercial vehicles sales volume fell 51 percent YoY compared to the 9 per cent YoY decline for light commercial vehicles, which benefitted from increased demand for the last mile connectivity.”

The India Ratings & Research has further predicted that the sales volume of CVs will fall by 30 to 35 per cent YoY in FY 21.