Kolkata, Jul 21 (UNI) The Federation of Automobile Dealers Associations (FADA) today

said increased demand from the rural market had boosted retail sales.

Releasing the Monthly Vehicle Registration Data for the Month of June’20, FADA

President 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," he said.

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, led 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,” Mr Kale said.

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.

UNI PL BM