Auto retail sales jump 22% in June, fastest growth in three months

Record June retail sales across vehicle segments underscore resilient consumer demand, supported by GST changes, rural momentum and rising adoption of alternative-fuel vehicles

Automobile retail sales grew the fastest in three months to 2.5 million units, recording a 22 per cent annual growth and the best ever sales in June, according to data available from the Federation of Automobile Dealers Associations (Fada). Overall auto retail sales had jumped 13 per cent in April and 10 per cent in May. 

Growth in commercial vehicles segment hit a three-month high at 17 per cent, after a 15 per cent growth in May and a 5 per cent in June. 

Two-wheelers, three-wheelers, commercial vehicles, passenger vehicles and overall registrations posted their highest-ever June figures. 

The boom in passenger vehicle sales reflects rising consumer confidence with the pent-up demand and benefits from goods and services tax (GST) rate rationalisation manifesting in the higher numbers, said Madan Sabnavis, chief economist at Bank at Baroda. “The lower base effect has also helped. More importantly, it looks like the entry segment of automobiles is reviving which is important,” he added. 

 

Commercial vehicle retail sale stood at 90,972 units in June as compared to 77,836 units in the same time a year ago, with rural India growth seen at 22 per cent, outpacing urban growth at 12.75 per cent, Fada said on Monday. Passenger vehicle sales grew 29 per cent, with the share of alternative fuel touching the 40 per cent mark for the first time. 

The momentum in the industry got reflected in two-wheelers and three-wheelers also, as both these segments posted a growth of 21 per cent and 16 per cent, respectively. 

“The West Asia crisis cooled down only by the end of June. However, positive movements geopolitically, and also a rise in last-mile delivery, helped the commercial vehicle segment during the month. The e-commerce segment is doing really well, and all these combined are leading to an increase in infrastructure activity,” said C S Vigneshwar, president, Fada. 

A good share of the economic momentum was reflected in steady freight activity, e-commerce-linked movement and normalising supplies, while the share of electric vehicles in the commercial vehicle segment rose to 3.53 per cent from 1.57 per cent a year ago — an all-time high. 

Fada came out with a ‘cautiously optimistic’ outlook for July, with monsoon catch-up and rural cashflows becoming the key swing factors ahead of the festive season. 

Tractors saw a 25 per cent rise, while wheeled construction equipment declined by 41 per cent on a high base. Tractors recorded their second-best June ever. “That such records have come in a seasonally transitional month underscores the structural depth of the India Growth Story and the widening aspirations of Bharat,” he added. 

Market leader Maruti Suzuki witnessed a 37 per cent rise in sales versus last year to 168,000 units, Tata Motors moved up by 51 per cent to 57,009 units, and Mahindra and Mahindra by 22 per cent to 54,099 units, pushing the segment numbers up. 

Two-wheeler sales stood at 18,28,458 units in June, up 21.22 per cent Y-o-Y. Two-wheelers are also seeing a decisive powertrain shift as EV share crossed double digits for the first time at 11 per cent against 7 per cent a year ago. A Shriram Mobility report highlighted that bus sales rose 24 per cent month-on-month, while agricultural tractor sales grew 18 per cent, approximately, reflecting seasonal demand.

 

With inputs from Himanshi Bhardwaj