Retail two-wheeler sales crash after Covid surge

NEW DELHI:  Owing to the economic impact of the resurgent Covid-19 pandemic and rising fuel prices, retail two-wheeler sales fell by a whopping 35.26 per cent in March 2021 to 11,95,445 units as against 18,46,613 units sold in the same month last year, said the Federation of Automobile Dealers Associations (FADA) on Thursday.  

On the contrary, two-wheeler manufacturers had reported a high double-digit growth in factory dispatches for the month earlier. For example, Hero MotorCorp reported a 72 per cent rise in domestic wholesales in March 2021 while FADA’s data said that Hero’s retail sales fell by nearly 50 per cent year-on-year in March 2021. 

“According to Pew Research, financial woes brought by Covid-19 have pushed about 32 million Indians out of the middle class, undoing years of economic gains. This had its impact on 2-wheelers as it saw one of its steepest de-growth in the last few months. This, coupled with high fuel prices and price increase, acted as a double whammy. It not only created havoc in the entry-level customers’ minds, but also kept them away from visiting showrooms,” FADA President Vinkesh Gulati said. 

Going forward, two-wheeler sales may face more challenges if the second wave of the pandemic continues. Lockdown-like restrictions implemented by states, especially Maharashtra, may impact four-wheeler sales too. However, during March 2021, passenger vehicle sales grew by 28.39 per cent year-on-year to 2,79,745 units. 

“Fear amongst consumers with the last year... in mind has started keeping them away from making high ticket purchases. The effects of the same can be seen in the two-wheeler category where inquiry levels are low. This, coupled with the semiconductor shortage, will continue to hamper not only Passenger Vehicles but also two-wheelers as an ABS shortage is also currently ringing alarm bells,” said the dealers’ association. 

Maharashtra contributes around 10-11 per cent of the retail auto sales and the current lockdown is going to have a catastrophic effect on overall sales in April in the state, it added. According to FADA, retail PV sales grew in March due to the low base of last year. The shortage of semiconductor wafers also continues to linger and has resulted in a PV waiting period of as high as seven months. Overall vehicle sales across all segments fell by a cumulative 28.64 per cent to about 16,49,678 units last month.