Retail auto sales for August 2022 saw an 8 percent annual growth, according to the Federation of Automobile Dealers Associations (FADA).
Except for tractors, which were down 32 percent, all other categories saw sales growth.
Sales of two-wheelers, three-wheelers, passenger cars, and commercial vehicles rose 8.5 percent, 83 percent, 6.5 percent, and 24 percent, respectively.
According to the FADA, when compared to August 2019, the month before the outbreak, total retail vehicle sales continued to decline -7 percent.
While passenger cars showed healthy double-digit growth of 41 percent, growth in commercial vehicles also turned into positive growth of 6 percent. All other categories were in red, with three-wheeler and two-wheeled tractors down 16 percent, 1 percent and 7 percent, respectively.
According to FADA, good monsoons failed to ignite the festive spirit and thus affected the demand during Ganpati.
“As the semiconductor supply continues to ease up, the auto trade and the photovoltaic sector in particular are preparing for the best festive season in a decade.”
Commenting on the retail sales data for August, FADA President Manish Raj Singhania said- “Automotive business for August 22 saw an overall growth of 8%. August opens the door for the start of the festival season. While dealers expected Ganesh Chaturthi to do well in August, they weren’t. The results are encouraging so far, as despite the good monsoon, the festive season started with a refreshment during the Ganpati River.
While the two-wheeler segment grew 8.5 percent year-over-year, it is still facing Covid blues due to Bharat’s weak performance and is still not beyond 2019 levels.
This, along with the high price, has made the two-wheeled product out of reach of most novice customers.
“With the erratic monsoons, yields were low and the flood-like situation restricted the movement of customers.”
Three-wheeler space continued its healthy double-digit growth compared to last year. It has now also tied for 2019 sales for the first time.
Electrification is also the highest in this category with the e-rickshaw leading the way. There is a clear indication that customers are now preferring electric cars over vehicles with an internal combustion engine (ICE) as ICE’s three-wheeler continues to decline double-digit growth compared to pre-Covid levels.
The commercial vehicle segment continued to post a rebound in economic activities after the monsoon and grew by 24 percent year-on-year.
“This along with the government’s push for infrastructure, new launches by OEMs and better conversion in fleet operations have kept the sector green. Apart from this, the passenger carrier sector is also showing good demand due to increased buying from educational institutions.”
The passenger car segment is still on an uptrend as it grew by 6.5 per cent as demand for all sub-categories of vehicles except entry level remained strong. This is also helped by the new feature-rich launches that manufacturers have been making in the past few months. As the shortage of semiconductors is slowly becoming, the availability of the vehicle has certainly improved but the waiting period is still there due to the high demand for feature-rich variants.
Speaking of the near-term outlook, Singhania said, while September brings with it Onam and Navratri, it also brings the 15-day period of Shraadh, which is generally considered an inauspicious period for car buying.
With the loosening of supply, the passenger car segment will surely witness the best ever festivities like Navratri and Diwali in the past decade. Besides, if car prices continue to stabilize and there are no more health-related risks, we could see a rise in the long-awaited 2W space that has not shown the required growth since the last festivals.
As the government continues to push for infrastructure spending, we will also see a rise in commercial space.
In general, FADA changed its position from “cautiously optimistic” to “optimistic” as it entered the holiday period.
(Except for the headline, this story has not been edited by the NDTV crew and is published from a syndicated feed.)