Retail automobile sales grew 8.31 percent in August this year as per the latest data released by FADA on Thursday. The total vehicle retail stood at 15,21,490 units compared to 14,04,704 units in August 2021. However, compared to August 2019 or the pr-Covid sales, this is still about 7 percent lower.
Passenger vehicles (PV) retail sales stood at 2,74,448 units as compared to 2,57,672 units in the year-ago month, a growth of 6.51 percent. What’s particularly striking is that passenger vehicles sold in August 2022 is over 40 percent more that what was sold in August 2019, indicating a strong run going into the festive season.
Two-wheeler retail sales also grew by 8.52 percent at 10,74,266 units in August 2022 as against 9,89,969 units in the same month last year, it added. However, compared to pre-Covid levels, the sentiment remains significantly muted.
FADA said the three-wheeler (3W) segment witnessed the highest growth rate last month posting 83.14 per cent increase at 56,313 units, up from 30,748 units in the same month a year ago.
Commercial vehicles (CV) also witnessed a robust 24.12 per cent growth at 67,158 units as against 54,107 units in the year-ago month. The Government push for infrastructure has given the much need fillip to sentiment.
FADA President Manish Raj Singhania said August retail sales were not encouraging and not as per expectations of dealers, who anticipated a good start to the festive season with Ganesh Chaturthi.
“When compared with August 2019, a pre-Covid month, total vehicle retails fell by 7 per cent. While PV outperformed handsomely by growing 41 per cent, CV also turned positive by growing 6 per cent and thus came out of the Covid blues. All the other segments were in the red with 2W, 3W and tractors falling by 16 per cent, 1 percent and 7 percent, respectively,” he added.
Singhania said although the two-wheeler segment grew 8.5 percent last month on a year-on-year basis, “it continues to face Covid blues due to underperformance of Bharat (rural India) and is still not above 2019 levels”.
“This coupled with price hikes has made the 2W product out of reach for most entry-level customers. With erratic monsoon, the crop realisation has been low and flood-like situations have restricted customer movement,” he said.
On the other hand, the PV segment continues to be on a strong run as demand for all sub categories of vehicles except entry-level remained strong.
“This is also aided by new feature-rich launches which OEMs have been doing since the last few months. With semiconductor shortage slowly becoming a pass, vehicle availability has definitely improved but waiting period continues to remain due to high demand in higher feature rich variants,” Singhania said.
Similarly, he said the CV segment also continues to witness an upswing in economic activities post monsoon.
The government’s infrastructure push, new launches by OEMs and better conversion in fleet operations has kept the segment in the green, he said, adding “the passenger carrier segment is also showing good demand due to increased buying from educational institutions”.
The three-wheeler space has now also equalled 2019 sales for the first time. Electrification is also the highest in this category with e-rickshaw leading the way.
“There is a clear indication that customers are now preferring electric vehicles over internal combustion engine (ICE) vehicles as ICE three-wheeler continues to see double-digit degrowth when compared to pre-Covid levels,” Singhania said.
On the outlook, FADA said , with easing of supply, the PV segment will definitely see the best ever festivities (Navratri and Diwali) in the last one decade.
“Along with this, if vehicle prices continue to remain stable and there are no more health related threats, we may see an uptick in the much awaited two-wheeler space which has not shown the required growth since last festivals.” While Onam and Navratri fall in September, the month also has 15-day period of Shraadh, generally considered as an inauspicious period for buying vehicles, it added.