Auto retail sales continue to maintain positive momentum in the month of June as the total vehicle registered in the last month increased by 27% to 15,50,855 units compared to June 2021, as per the data released by the Federation of Automobile Dealers Associations (FADA) based on Vahan.
According to data, all categories posted double-digit growth. Two-wheelers, three-wheelers, passenger vehicles, tractors and commercial vehicles were up by 20%, 212%, 40%, 10% and 89% respectively.
As per FADA, though few categories are consistently showing recovery, full recovery is yet to be witnessed when compared to pre-covid times. However, compared to June’19, total vehicle retail was down by 9%. Passenger vehicles and tractors continued to show growth by rising 27% and 40%.
For the first time, commercial vehicles also increased by 4%. The two categories which continue to underperform were two-wheelers and three-wheelers which fell by 16% and 6% respectively.
| Segments | June 22 | June 21 | YoY % |
| Two-wheeler | 11,19,096 | 9,30,825 | 20.23% |
| Three-wheeler | 46,040 | 14,735 | 212.45% |
| Passenger vehicle | 2,60,683 | 1,85,998 | 40.15% |
| Tractor | 57,340 | 52,289 | 9.66% |
| Commercial vehicle | 67,696 | 35,810 | 89.04% |
| Total | 15,50,855 | 12,19,657 | 27.16% |
Vinkesh Gulati, President, FADA said, “Poor market sentiment especially in rural India, high cost of ownership, inflationary pressure and June generally being a lean month due to rains kept two wheelers sales at low speed.”
“In the three wheeler category, a major shift has happened in the electric category. Apart from this, permit issues and frequent price increase remained the biggest dampeners. The passenger vehicle segment continued to see robust growth. An increase in wholesale sales clearly shows that semiconductor availability is now getting easier. Waiting periods, especially in the compact SUV and SUV segment, continued to remain high. New vehicle launches are seeing robust booking thus reflecting a healthy demand pipeline.” he added.
Gulati also pointed out that the CV segment showed strength for the first time as it grew by 4% when compared to June’19, a pre covid month. Bus segment along with LCVs are showing good traction.
Auto Retail Sales in India: Outlook
The Russia – Ukraine crisis has increased inflationary pressure the world over. RBI Governor during the recent Monetary Policy meeting has also flagged high inflation as a major cause of concern.
In the past few months, prices of almost all essential items have moved northwards, thereby putting pressure on the common man’s household budget and thus reducing his disposable income.
Additionally, the high fuel prices have had a spillover effect on transportation and made it expensive. This will have a negative effect on entry-level PV as well as the 2W segment which is generally dominated by first-time buyers.
On the other hand, ease in availability of semiconductors will see increased supply, especially in the PV segment and thus reduce the waiting period. If Rural India stabilizes, Auto retail will enter the festive season on a good note.
