How vehicle registrations declined sharply in May 2020 due to the pandemic

Automobile is one of the worst hit sectors by the pandemic and lockdown. According to Federation of Automobile Dealers Associations (FADA), April 2020 recorded nil retail sales for the first time in history. In the successive month of May 2020, overall vehicle registrations declined sharply by 88.9 per cent YoY.

Story: Shivani Sharma
Design: Pragati Srivastava

In the month of May 2020, overall vehicle registrations declined sharply by 88.9 per cent YoY. This comes against the backdrop of an existing falling consumer demand scenario since Q4-FY19. Covid-19 pandemic has worsened the situation further and the sector continues to grapple with various challenges ranging from supply chain, distribution and falling consumer sentiments, etc.

Two-wheeler automobile registrations declined by 89 per cent in May 2020 due to economic slowdown. From 14.2 lakh registrations in May 2019, it dipped to only 1.59 lakh registrations.

The registration data shows that three-wheeler sales have declined by nearly 96 per cent in the month of May 2020, from the same month last year.

Around mid-May 2020, auto dealerships and workshops resumed their operations after staying temporarily closed for close to 1.5 months. This slowed a decline in the industry. Commercial vehicles show a negative decline of 96 per cent in the month of May.

At the end of May, out of 26,500 outlets about 60 per cent showrooms and 80 per cent workshops were operational across the country. Initial 10 days of June 2020 witnessed a plunge in demand. The passenger vehicles segment registration declined by 87 per cent.

Weak consumer confidence in urban areas continued to affect purchase decisions. All the segments of automobiles have had a negative demand in recent months due to lockdown and economic depression. Tractor registrations have declined by 75 per cent in May 2020.