New Delhi: Retail vehicle sales for the month of August 2022 saw year-on-year growth of 8 per cent, said the Federation of Automobile Dealers Associations (FADA).
Except for tractors, which decreased by 32 per cent, all the other categories have seen a growth in sales.
Two-wheeler, three-wheeler, passenger vehicles and commercial vehicles sales were up by 8.5 per cent, 83 per cent, 6.5 per cent and 24 per cent, respectively.
According to FADA, when compared with August 2019, a pre-covid month, total vehicle retails continued to fall by -7 per cent.
While passenger vehicles showed double-digit healthy growth of 41 per cent, growth in commercial vehicles also turned positive by 6 per cent. All the other categories were in red with two-wheeler three-wheeler and tractors falling by 16 per cent, 1 per cent and 7 per cent, respectively.
According to FADA, a good monsoon failed to ignite festive spirits thus impacting demand during Ganpati.
“As semi-conductor supply continues to ease, Auto Retail and PV segment especially, geared up to have the best festive season in a decade.”
Commenting on August retail sales data, FADA President, Manish Raj Singhania said: “Auto Retail for the month of August’22 saw an overall growth of 8%. August opens the door for festival season to kick in.
While Dealers anticipated good Ganesh Chaturthi in August, the results thus far have not been encouraging. In spite of good monsoons, the festive season began with a dampener during Ganpati.
While the two-wheeler segment has grown by 8.5 per cent year-on-year, it continues to face Covid blues due to the underperformance of Bharat and is still not above 2019 levels.
This coupled with price hikes has made the two-wheeler product out of reach for most entry-level customers.
“With erratic monsoon, the crop realisation has been low and flood like situation has restricted customer movement.”
The three-wheeler space continued its healthy double-digit growth when compared year-on-year. It has now also equalled 2019 sales for the first time.
Electrification is also the highest in this category as e-Rickshaw leads the way. There is a clear indication that customers now prefer electric vehicles over internal combustion engine (ICE) vehicles as ICE three-wheeler continued to see double-digit de-growth when compared to pre-Covid levels.
The commercial vehicle segment continued to witness an upswing in economic activities post-monsoon and saw a growth of 24 per cent year-on-year.
“This along with the government’s infrastructure push, new launches by OEMs and better conversion in fleet operations has kept the segment in green. Apart from this, the Passenger Carrier segment is also showing good demand due to increased buying from Educational Institutions.”
The passenger vehicle segment continues to be on a bull run which grows 6.5 per cent as demand for all subcategories of vehicles except entry level remained strong. This is also aided by new feature-rich launches which manufacturers are doing in last few months. With semi-conductor shortage slowly becoming a passe, vehicle availability has definitely improved but the waiting period continues to remain due to high demand for higher feature-rich variants.
Talking about the near-term outlook, Singhania said, while the month of September brings with it Onam and Navratri, it also brings the 15-day period of Shraadh, generally considered as an inauspicious period for buying vehicles.
With the easing of supply, the passenger vehicles segment will definitely see the best-ever festivities like Navratri and Diwali in the last 1 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 2W space which has not shown the required growth since the last festivals.
With the government’s continuous push in infrastructure spending, we will also see an uptick in commercial space.
Overall, FADA changed its stance from ‘cautiously optimistic’ to ‘optimistic’ as it enters the festive period.