The strong performance was supported by SUV demand, the introduction of new models, greater availability, effective marketing, consumer schemes, and the auspicious wedding season.
The total retail sales of vehicles witnessed 11 per cent year-on-year growth during September 2022, a report by the Federation of Automobile Dealers Associations (FADA) said on Tuesday. October would see auto retail on high grounds with 24 days of festivities out of the total 31 days, FADA said in the report – Vehicle Retail Data for September 2022.
The report said dealers anticipated this to be the best festive in a decade for the passenger vehicle (PV) segment as it is expected even higher sales during the month. The report said all the other categories were in green except for tractors, which decreased 1.5 per cent. 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.
Compared with September 2019, a pre-Covid month, total vehicle retail sales continued to be lower by 4 per cent. PV segment sustained its healthy run by growing 44 per cent. Similarly, growth in 3W, tractor and CV also closed in the green by surging 6 per cent, 37 per cent and 17 per cent, respectively. It is only the 2W segment which continues to be a drag as the same fell 14 per cent.
Rural India in states like Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh, and Jharkhand showed a weakness with a lower contribution to auto retail, especially in the entry-level — 2W and PV category, the report said. 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 hope for showing healthy growth.
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 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, 2W companies raised prices by 5 times in the past one year. Apart from this, the Reserve Bank of India’s (RBI)’s fight with 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, are finding extremely less buyers thus dragging the entire segment.
The 3W segment continued to see a structural shift from internal combustion engine (ICE) to electric vehicle (EV), the FADA report said. This is also reflected in an extremely healthy growth rate of e-rickshaw. Apart from better availability of vehicles with full range of products including alternate fuels, customers have started using public transport and rickshaw service, thus fuelling demand in this segment.
While the CV segment grew 19 per cent, it is the heavy commercial vehicle (HCV) segment that showed a healthy growth of 40 per cent y-o-y, the FADA report said. Reasons such as better availability of vehicles, festivities, bulk-fleet purchase,s and government’s continued push for infrastructure development, made this segment shine.
The report also added that the PV segment continued it’s Bolt’ run by showing a 10 per cent y-o-y growth and 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 for getting their favorite vehicles during the auspicious period. The waiting period continues to range between three months and 24 months, especially for sport utility vehicles (SUVs) and compact SUVs which have become the absolute choice for today’s customers.”