Car sales recover, two-wheeler registrations still down 46% | Ahmedabad News
September 11, 2020
Ahmedabad: After the lockdown, car sales finally reached pre-Covid levels in August, however demand for two-wheelers continues to remain low. According to data from the Federation of Automobile Dealers’ Associations (FADA), registrations of two-wheelers declined by 46% from 85,284 in August 2019 to 46,486 in August this year. Industry insiders say liquidity issues and closed colleges are the major reasons for low uptake in the two-wheeler segment. Pranav Shah, the Gujarat FADA chairman, said, “As colleges have not opened, students who usually buy two-wheelers at this time of the year have not made purchases. The exodus of migrant workers, who also buy two-wheelers, has meant that they haven’t made purchases either. Other two-wheeler buyers are in financial stress with income shortfall and job and pay cuts forcing them to defer purchases.” “Finance companies have also tightened lending norms, due to which customers who want to buy two-wheelers on loans are unable to do so,” Shah added. Industry estimates suggest that 50% of two-wheeler buyers are opting for financing. On the other hand, the car market has been performing well. FADA data suggests some 16,821 cars were registered in August 2020, a 2.4% decline against 17,232 last year. “Demand is good in the entry-level segment and we are witnessing more traction from first-time buyers. Auto companies however, haven’t resumed full production and there is a waiting period for several models,” said Rajnish Arora, CEO of a car dealership in Ahmedabad. The worst affected is demand for three-wheelers and commercial vehicles. Three-wheeler registrations have declined by 91% and that of commercial vehicles was down by 61% in August.