Medilytix Bureau : With the coming 24 days of festivities in October, the Federation of Automobile Dealers Associations (FADA) was sure that October would see auto retail on high ground.
According to the statement in the Vehicle Retail Data for September 2022 report, dealers anticipated October to be the best festive in a decade for the passenger vehicle (PV) segment as it is expected to have even higher sales during the month.
As in September, the automobile sector witnessed a total retail sales increase of 11 per cent year-on-year in vehicle sales as better supplies from manufacturers enabled dealers to ramp up customer deliveries amid the ongoing festive period.
FADA President Manish Raj Singhania said, “Auto retail for the month of September 2022 saw an overall growth of 11 per cent. September witnessed both the inauspicious period of Shradh from September 10–25 and the festive period which began with Navratri on September 26. Due to this, the full potential for the month was not realised as it should have been.
The report said all the other categories were in green except for tractors, which decreased 1.5 percent. The sales of two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV) and commercial vehicles (CV) went up 9 per cent, 72 per cent, 10 per cent and 19 per cent, respectively.
Total vehicle retail sales decreased by 4% in September 2019 compared to August 2019, a pre-COVID month. The PV segment sustained its healthy run by growing by 44 per cent. Similarly, growth in 3W, tractors and CV also closed in the green by surging 6 per cent, 37 per cent and 17 per cent, respectively. Only the 2W segment remains a stumbling block, falling by 14%.
The report said that rural India in states like Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh and Jharkhand showed weakness with a lower contribution to auto retail, especially in the entry-level (2W and PV) categories. While overall retail in PV will be at a decade high during this festive season, it is the 2W category where the auto industry continues to pin its hopes of showing healthy growth.
The 2W segment showed a growth of 9 per cent y-o-y but fell 14 per cent from September 2019. Due to increased input costs, two companies raised prices five times in the past year. Apart from this, the Reserve Bank of India’s (RBI) fight against inflation saw rate hikes, which continued to make vehicle loans expensive. The report said while India was showing revival signs, Bharat was yet to perform and 2W, especially the entry-level vehicles, were finding extremely few buyers, thus dragging the entire segment down.
The 3W segment continued to see a structural shift from internal combustion engines (ICE) to electric vehicles (EV), the FADA report said. This is also reflected in the extremely healthy growth rate of e-rickshaws. Apart from the better availability of vehicles with a full range of products including alternate fuels, customers have started using public transport and rickshaw services, thus fuelling demand in this segment. While the CV segment grew by 19 percent, it was the heavy commercial vehicle (HCV) segment that showed a healthy growth of 40 percent y-o-y, the FADA report said. Reasons such as better availability of vehicles, festivities, bulk-fleet purchase, and the government’s continued push for infrastructure development made this segment shine.
The report also added that the PV segment continued its ‘Bolt’ run by showing a 10 per cent y-o-y growth and a 44 per cent when compared to September 2019, a pre-Covid month. The report said: “Better availability due to easing semi-conductor supply, new launches, and feature-rich products kept customers glued to dealerships to get their favourite vehicles during the auspicious period. The waiting period continues to range between three months and 24 months, especially for sports utility vehicles.