The automotive retail sales for May has grown 10 percent with 20,19,414 vehicles sold across category, compared to 18,33,421 a year ago.
In terms of segment-wise sales, two-wheelers with 14,93,234 units (+9.32%), three-wheelers with 79,433 units (+78.57%), passenger vehicle with 298,873 units (+4.31%), tractors at 70,739 units (+9.63%) and commercial vehicles with 77,135 units (+7.19%) were all in the positive.
Manish Raj Singhania, President, FADA stated that the two-wheeler and CV sales did continue to face some challenges, recording high single digit setback of -8% and -7% respectively. Electric Vehicles (EVs) made impressive strides this month, contributing to 8% of the total vehicle retail. This was buoyed by a surge in electric two-wheeler sales that contributed 7% and 3W EV sales contributing a
substantial 56% of their respective total sales. The CV and PV categories also marked their presence in the EV landscape, with respective contributions of 0.5% and 2.5%.”
He further stated the two-wheeler sales were positively influenced by seasonal factors like the marriage season, changes in the FAME 2 subsidies effective from June, and the recovery of rural demand, which hints towards a promising future in the aftermath of the COVID-19 pandemic.
In the Passenger Vehicle segment, improved availability of vehicles, strength of pending orders, and robust demand for new launches drove a positive momentum, helping the segment rebound after a slump in the previous month.
The commercial vehicle segment experienced sustained growth, underpinned by the government’s focus on infrastructure development. And the bus segment displayed a notable increase, driven by improved financing options and higher sales in academic institutions.
Going forward, Singhania cautions that the auto retail sector faces diverse challenges across the two-wheeler, commercial vehicle and passenger vehicle segments.
For 2W, seasonal factors could boost demand, but concerns like weather-induced walk-in reductions, inventory, and regulatory norms persist. The CV sector anticipates improved vehicle availability but concerns about RDE norms and seasonal effects may impact sales. The PV sector expects increased demand, particularly for new models, compact and full-sized SUVs and EVs, but inventory pressure and right model availability could pose challenges.
FADA advocates for a balanced auto retail ecosystem, urging collective action to regulate inventory levels, negotiate lower interest rates and support two-wheeler dealers by eliminating illegal MBO sales.
While acknowledging near-term challenges, FADA maintains a stance of cautious optimism, highlighting the potential for growth through collaborative efforts and alignment with market trends.
The anticipated stable interest rates by RBI’s Monetary Policy Committee could maintain vehicle demand and positively impact auto sales. However, supply chain issues, demand-supply dynamics, and regulatory changes also play a role in shaping the auto retail outlook.
For 2W, seasonal factors could boost demand, but concerns like weather-induced walk-in reductions, inventory, and regulatory norms persist.
