FADA retail sales data show overall numbers down by 8% YoY; three-wheelers (80%) and CVs (27%) are in growth mode, two-wheelers (-11%), PVs (-5%) and tractors (-28%) saw declines.
04 Aug 2022 | 1916 Views | By Autocar Pro News Desk
Here is the real-world, on-ground market reality of vehicle sales in India. As per the vehicle retail data for July 2022 released by the Federation of Automobile Dealers Associations (FADA) today, total vehicle retails at 14,36,927 units are a 7.84% decline from July 2021’s 15,59,106 units.
Three-wheelers (up 80%) ...
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Here is the real-world, on-ground market reality of vehicle sales in India. As per the vehicle retail data for July 2022 released by the Federation of Automobile Dealers Associations (FADA) today, total vehicle retails at 14,36,927 units are a 7.84% decline from July 2021’s 15,59,106 units.
Three-wheelers (up 80%) and commercial vehicles (27%) were the only segments which closed positively while two-wheelers (-11%), passenger vehicles (-5%) and tractors (-28%) saw YoY sales declines.
When compared with July 2019, a pre-Covid month, total vehicle retails have fallen by 20%. While PVs (19%) and tractors (7%) continue to outperform, all the . All the other categories were in red with 2W, 3W and CV falling by -28%, -15% and -4% respectively.
At the end of July 2022, average Passenger Vehicle inventory ranges from 20-25 days while that for two-wheelers ranges form 20-23 days.
2W sales await rural India bounty, PVs on a dream run
Commenting on the July 2022 retail sales, FADA President Vinkesh Gulati said, “Continuing with our quest of a deeper insight in auto retail figures, FADA for the first time has released 3W sub-segment retail figures. After breakup of the CV segment, the 3W sub-segmentation will help all the stake holders understand the 3W market in much detail.
“July is generally considered as a lean month before festival season hits in August.
The two-wheeler retail run witnessed poor demand as rural India continues to underperform. This coupled with high inflation, erratic monsoon and high cost of ownership continues to keep bottom of the pyramid customers at bay.”
“The three-wheeler space continued to see demand recovery even though full recovery to pre-Covid levels is still some time away. Digging deeper, it is clearly evident that e-rickshaws is the biggest mover in the segment. Demand recovery in three-wheeler passenger category also shows that Covid is now behind us as passenger movement has once again started gaining traction,” said Gulati.
He continued, “CV retail figures continue to witness good demand as the government’s infrastructure push is helping customers in concluding their purchase. The bus segment also witnessed beginning of demand recovery as educational institutions and offices are once again back to normal mode.
The PV segment is witnessing a dream run as retail sales are already higher than 2019. Even though there is a blip in July numbers, the industry is continuously introducing new models especially in the compact SUV segment. Along with this, a better supply in coming months will help in bringing down customer anxiety due to large waiting period. We also urge all PV OEMs to recalibrate their supplies as per the market demand and avoid pushing low moving stocks.”
FADA’s near-term outlook: Cautiously optimistic
July saw erratic monsoon where some states got less rainfall while others got more than required. The unfavourable weather resulted in decreased Kharif sowing as area under paddy dipped by 13% at the end of July. Tractor sales which were showing good growth till a month ago hence saw a big dip in July.
After the Russia-Ukraine war, the threat of a Taiwan-China war could have an adverse impact on the auto industry. Chip-maker TSMC has raised a red flag that in the event of a war, Taiwanese chip manufacturers would be rendered ‘non- operable’.
Also, India’s services sector PMI (purchasing manager’s index) fell to 4-month low in July to 55.5 showing that growth momentum lost steam as result of weaker sales growth and inflationary pressure in previous month.
Overall, FADA remains cautiously optimistic due to the above factors as it enters the festival season.