Indian automobile sales declined by 54.79 percent year on year to 535,855 units in May this year, amid the impact of the second wave of the pandemic and the closure of dealership outlets due to lockdown restrictions, according to data released by the Federation of Automobile Dealers’ Association (FADA) on Friday, June 11.
FADA sales data is based on actual registrations of vehicles with motor vehicle departments of the government, as opposed to manufacturers which take despatches from plants to dealers as sales.
According to the FADA data, four-wheeler sales declined by 58.96 percent in May this year to 85,733 units, compared to 208,883 units in April.
Two-wheeler sales were down 52.52 percent in May to 410,757 units, compared to 865,134 units in April.
"Since the current lockdown has already lasted well over 30-45 days and is still continuing in south India, revenues for most of the dealers are negligible as there are minimal sales. Due to this, dealers will not be able to repay their loan tranche payments which are becoming due. This will ultimately lead to default. Since there are no guidelines, extensions of tranches are considered as restructurings of loans. This will ultimately have a negative impact on dealers’ credit ratings,” Vinkesh Gulati, president of FADA, said in a statement.