Auto Industry Recovery Continues Post Covid Lockdown in August 2020

Let's have a quick look at the key automotive OEM factory dispatch numbers across categories in India in August 2020 and compare them to year-on-year change in monthly sales, as well as monthly trends.

We also analysed the vehicle registration data from the Ministry of Road Transport & Highway's Vahan database and compared the same to the factory dispatch data. Few key observations from this dataset analysed by AdvantEdge are as follows:

• Category leaders who focus on entry-level segments have recovered with growth in YoY factory despatch numbers (Maruti Suzuki - 4Ws, Hero Moto - 2Ws).
• Tractors seeing strongest growth of 70-80% from 2019 output.
• Commercial vehicles lagging recovery with with M&HV and 3W showing weakest offtake.
• Retail sales data coming from vehicle registrations is still lagging the factory output by 25-30% at an industry level.
• 4W retail sales data is better than 2W.
• Majority of retail sales lag is due to the CVs (-46% de-growth) and 3W categories (-69% de-growth).
• Fuel sale data also indicates that even thought petrol consumption is back to 92% in August, Diesel sales actually fell by 12% from July 2020 and hence this sluggishness in economic activity is showing up in CV sales volumes.
• Automotive OEMs are hopeful that the upcoming 2 month festive season critical and are looking to pile up inventory. 

Next few months critical to observe demand patterns and will give us a better sense of the vibrancy of this auto sector recovery which seems to be underway.