New Delhi: Total vehicle retail sales were up 28% year-on-year during this year’s month-long festival season.
Vehicle sales in all categories were in the green with 2-wheelers, 3-wheelers, passenger cars, tractors and utility vehicles growing 26%, 66%, 28%, 33% and 28%, respectively, the Federation of Automobile Dealers Associations (FADA) data released on Monday showed this. On an annual basis, total retail vehicle sales for the month of October 2022 grew by 48%. All categories closed in green with 2W, 3W, passenger vehicles, tractors and commercial vehicles registering 51%, 66%, 41%, 17% and 25% respectively.
Compared to October 2019, a pre-covid month, total vehicle retail sales for the first time closed in green with an 8% increase. With the exception of 3W which saw a marginal decline of 0.6%, all other categories were green with 2W, PV, Tractor and CV growing 6%, 18%, 47% and 13%.
“Auto retail for the month of October 22 saw overall growth of 48%. With most of the month under the holiday season, sentiment was overwhelmingly positive across all retail outlet categories. dealers,” said FADA Chairman Manish Raj Singhania.
Singhania added that the festive season of 2022 has brought joy to the automotive industry as for the first time, customers from all categories came out in large numbers and participated in festive shopping, making it the best of the last 4 years.
Dealers say sentiment has also started to improve at the rural level, but the same should hold for at least the next 3-4 months. Apart from this, new launches and good customer programs have also played a pivotal role in boosting demand.
The 3W segment posted massive growth of 66% year-on-year, but was slightly below the red line in 2019 with a decline of 0.6%.
The subcategory figures clearly show that a shift is occurring towards EV adoption as internal combustion engine vehicles are no longer the favourites. In a few pockets due to permit issues, new vehicle sales took a hit during the month.
The PV segment showed growth of 41% year-on-year and 18% compared to 2019.
The passenger vehicle segment continues to experience extremely high demand, especially in the SUV and compact SUV segments, including premium variants in most product categories.
With better vehicle availability coupled with new launches, the segment also had its best festive period in a decade, topping 2020 festival sales by 2%.
“The CV segment continues to get back on track growing 25% YoY and 13% from 2019. The festivities sparked better fleet sales. With increased mining and infrastructure projects in various regions, demand is holding up well and also getting back on track,” Singhania added.
On the short-term outlook, Singhania said that with the festivities winding down, the immediate next month typically sees some weakness in sales.
As farmers begin to receive their crops, the general sentiment continues to show headwinds, especially in the rural 2W segment. For auto retailers to show their strength, the 2W segment will need to grow for at least 3-4 months in the pre-covid months to come out of the woodwork.
The CV segment is expected to see continued demand due to rising infrastructure projects and government spending. While the PV segment continues to outperform, demand in the entry-level segment continues to show some softness.
Most manufacturers will now migrate to manufacturing vehicles to OBD-2 standards. This will certainly lead to a sharp increase in prices in all categories of vehicles as they come onto the market. In addition, as the end of the year approaches, many customers are waiting for vehicles produced in the new year.
FADA therefore remains cautious as the automotive industry approaches the end of the year. (ANI)