Retail Auto Sales Rise In August As Two-Wheelers Show Green Shoots Of Recovery

Sales of automobiles at dealerships rose over the year earlier, aided by better two-wheeler demand.

India’s retail auto sales increased 8.3% year-on-year to 15.21 lakh units in August 2022, according to Federation of Automobile Dealers Associations. But that’s still 7.5% lower than the corresponding pre-pandemic period in 2019.

“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,” Manish Raj Singhania, the newly appointed president at FADA, said in a statement. “In spite of good monsoons, the festive season began with a dampener during Ganpati.”

Also, with erratic monsoon, “the crop realisation has been low and flood-like situation has restricted customer movement”.

Sales of two-wheelers rose 8.5% over the year earlier to 10.74 lakh units in August, FADA’s data showed.

“While the two-wheeler segment has grown YoY, it continues to face covid blues due to underperformance of Bharat and is still not above 2019 levels,” Singhania said. “This, coupled with price hikes, has made the two-wheeler product out of reach for most entry level customers.”

The dealers’ body, however, expects an uptick in two-wheeler sales during festivals given the prices remain stable.

Passenger vehicle sales, the statement said, reported 6.5% growth at 2,74,448 units.

“The PV segment continues to be on a bull 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 are doing since last few months,” the statement said. “With chip 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.”

Commercial vehicle sales increased 24% year-on-year to 67,158 units in August.

“The CV segment continues to witness an upswing in economic activities post monsoon. This, along with the government’s infrastructure push, new launches by OEMs and better conversion in fleet operations has kept the segment in green,” the statement said. “Apart from this, the passenger carrier segment is also showing good demand due to increased buying from educational institutions.”

Only the passenger and commercial vehicle segments saw sales exceed the corresponding pre-pandemic levels.

Outlook

FADA changed its stance to “optimistic” from “cautiously optimistic” as the country enters the festive period.

“While the month of September brings with itself Onam and Navratri, it also brings the 15-day period of Shraadh, generally considered as an inauspicious period for buying vehicles. With easing of supply, PV segment will definitely see the best ever festivities (Navratri and Diwali) in last one decade,” it said.

“Along with this, if vehicle prices continue to remain stable and there is 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.”

Also, with the government’s continuous push in infrastructure spending, the CV space is likely to see an uptick.