Auto sales data say demand is tepid as low-income households hit harder

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The data of automobile sales when broken into sub-categories illustrate the problem besetting the economy—tepid demand, according to a media report. An analysis of SIAM and Vahan Dashborad data by the Business Standard said that though there is definite recovery in the economy “lacklustre demand” remains a big issue. The report said recovery in two-wheeler sales at wholesale level was much behind the same in car sales. To illustrate further, it said if 100 two-wheelers and 100 passenger vehicles were sold in January 2018, only 83 two-wheelers and 93 cares were sold in July 2021.

Passenger vehicles declines in FY 21

Car sales, at retail level, in August 2021 were back to January 2018 levels. Two-wheeler retail sales, however, are 22% lower, even after four years since 2018. Trailing 12-month averages have been used in both cases.

It shows that the low-income households, urban factory workers, construction labourers, people in the rural workforce have been hit harder than the salaried or business class.

In 2020-21 fiscal, passenger vehicle wholesales declined by 2.24% to 27,11,457 units as against 27,73,519 units in 2019-20, as per data by the Society of Indian Automobile Manufacturers (SIAM).

The total two-wheeler dispatches during the last fiscal by companies to their respective dealer partners declined by 13.19% to 1,51,19,387 units, as compared to 1,74,16,432 units in 2019-20.

Total commercial vehicles sales declined by 20.77% to 5,68,559 units last financial year, as against 7,17,593 units in 2019-20.

“On the sales front, a deep structural slowdown in the industry even before the pandemic, combined with the impact of Covid-19 in 2020-21, has pushed all vehicle segments back by many years. Recovery from here will require time and efforts, by all stakeholders,” SIAM President Kenichi Ayukawa had said.