8.31 percent increase in automobile retail sales in August, FADA.

The retail sales of automobiles in India grew 8.31 percent in August this year thereby increasing registrations of vehicles across the major cities in the country, reported the automobile dealers’ body Federation of Automobile Dealers Association (FADA) on September 8.

As per FADA data, total vehicle retail sales in the country stood at 15,21,490 units last month as compared to 14,04,704 units in August 2021. Among these, passenger vehicle (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.

However, FADA President Manish Raj Singhania said, “August retail sales were not encouraging and not as per expectations of dealers”. He reportedly anticipated a good start to the festive season with Ganesh Chaturthi.

Singhania added that in comparison to August 2019, the total vehicle retail sales had fallen 7 percent. However, post-COVID, the sale of passenger vehicles had grown by 41 percent and commercial vehicles by 6 percent which helped them in coming out of COVID blues. “All the other segments were in the red with two-wheelers, three-wheelers, and tractors falling by 16 percent, 1 percent, and 7 percent, respectively”.

In August 2022, the two-wheeler retail sales grew by 8. 52 percent selling 10,74, 266 units as against 9, 89, 969 units last year in the same month. To this, FADA added that the three-wheeler segment witnessed the highest growth rate last month selling 56,313 units thus registering 83.14 percent growth from 30, 748 units last year in the same month.

The sale of Commercial vehicles too witnessed a vigorous sale of 67,158 units registering a 24.12 percent growth by comparing the sale of 54,107 units last year in August.

The sale of automobiles in rural India has remained the same as in 2019 despite a growth of 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," he added.

Singhania asserted that the price hikes of two-wheelers products made them out of reach for most entry-level customers. Further, erratic monsoon, and crop fertilisation have been low and flood-like situations have restricted customer movement according to Singhania. But the personal vehicle segment continues to be on a strong run for all subcategory vehicles except the entry-level sale.

"This is also aided by new feature-rich launches which Original Equipment Manufacturers have been doing since the last few months. With semiconductor shortage slowly becoming a passe, vehicle availability has definitely improved but waiting period continues to remain due to high demand in higher feature rich variants," he said.

The Commerical Vehicle segment also continued to witness an upswing in economic activities during the post-monsoon season.

Singhania attributes it to the government’s infrastructure push, new launches by OEMs, and better conversion in fleet operations for keeping the segment green. “The passenger carrier segment is also showing good demand due to increased buying of educational institutions”, he added.

He stated that there is a clear indication that customers are now preferring electric vehicles over internal combustion engine (ICE) vehicles as ICE 3W continues to see double-digit growth when compared to pre-COVID levels.

According to FADA, if vehicle prices continue to remain stable and there are no more health-related threats, the automobile sector may see an uptick in the much-awaited two-wheeler space which has not shown the required growth since last festival.

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