Retail vehicle sales in August rise 8%, says FADA

Total vehicle retail for the month of August 2022 saw a year-on-year (YoY) growth of 8%, the Federation of Automobile Dealers Associations (FADA) said in a statement today, 8 September 2022.

Except tractors retail, which decreased 32% YoY, all the other categories grew last month. Two-wheelers (2W), three wheelers (3W), passenger vehicles (PV) and commercial vehicles (CV) were up by 8.5%, 83%, 6.5% and 24%, respectively.

When compared with August 2019, a pre-covid month, total vehicle retails continued to fall by 7%. While PV showed a double-digit healthy growth of 41%, growth in CV also turned positive by 6%. All the other categories were in red with 2W, 3W and tractors falling by 16%, 1% and 7%, respectively.

Commenting on how August'22 performed, FADA president, Manish Raj Singhania said, "August opens the door for festival season to kick in. While Dealers anticipated good Ganesh Chaturthi in August, the results thus far has not been encouraging. In spite of good monsoons, festive season began with a dampener during Ganpati.

While the 2W segment has grown by 8.5% YoY, it continues to face covid blues due to underperformance of Bharat 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 situation has restricted customer movement.

The 3W space continues its healthy double digit growth (grows 83% YoY) when compared YoY. It has now also equalled 2019 sales for the first time. Electrification is also the highest in this category as e-Rickshaw leading the way. There is a clear indication that customers are now preferring electric vehicles over ICE vehicles as ICE 3W continues to see double digit de-growth when compared to pre-covid levels.

The CV segment continues to witness an upswing in economic activities post monsoon and saw a growth of 24% YoY. This along with 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 PV segment continues to be on a bull run (grows 6.5% YoY) 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. With semi-conductor 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."

In its outlook, FADA said that while the month of September brings with itself Onam and Navratri, it also brings the 15-days 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 1 decade. "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 2W space which has not shown the required growth since last festivals. With Government's continuous push in infrastructure spending, we will also see an uptick in CV space," it added.

"As semi-conductor supply continues to ease, Auto Retail and PV segment especially, geared up to have the best festive season in a decade."

Overall, FADA changes its stance from 'cautiously optimistic' to 'optimistic' as it enters the festive period.

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