Passenger vehicle retail sales on a slow lane in May: the body of auto dealers

The FADA said overall auto retail sales were 16,46,773 units in May.

New Delhi:

Retail sales of passenger vehicles rose last month but sales of two-wheelers and utility vehicles remained weak compared to pre-Covid May 2019, according to car dealership body FADA.

On Monday, the FADA said overall auto retail sales were 16,46,773 units in May, down from 18,22,900 units in May 2019.

“Retail sales for May 2022 vs. May 2019 reveal that sales are still not on a growth trajectory as overall retail sales were down 10%. While PV and tractors continued to race positive…sales of two-wheelers, three-wheelers and CVs have yet to show signs of good health,” said Federation of Automobile Dealers Associations (FADA) President Vinkesh Gulati, in a press release.

While a year-on-year (YoY) comparison with May 2021 shows an exceptionally healthy rate of growth across all categories, it is important to note that May 2021 and May 2020 were impacted by the nationwide lockdown in due to the Covid pandemic, he said.

According to him, a better comparison will be with May 2019 which was a normal month before Covid.

Last month, retail passenger vehicle (PV) sales were 2,63,152 units. That was 11% more than the 2,36,215 units sold in May 2019.

Retail sales in May 2021 and May 2020 hit by Covid were 86,479 units and 31,951 units, respectively.

“The PV segment, which has already surpassed May 2019 figures, is experiencing huge demand. Dealers are unable to meet the same demand due to supply issues,” he said, adding that this resulted in an increase in the waiting period from three months to two years.

“Healthy bookings and single-digit cancellations show that demand can remain stable even when normal supply resumes in the coming months,” Gulati noted.

Last month, two-wheeler sales amounted to 12,22,994 units. It was at 4,10,871 units in May last year.

In May 2019, sales of two-wheelers amounted to 14,20,563 units.

“The two-wheeler segment saw a slight improvement in overall sales compared to April this year,” Gulati said.

As sales of electric two-wheelers grew rapidly, fires across nearly every brand created fear in the mind of the customer, he said.

“This, coupled with supply chain issues, has significantly reduced sales of two-wheeled electric vehicles compared to last month,” Gulati said.

Commercial vehicle sales were 66,632 units last month, compared to 17,607 units in May last year. It remained low, however, compared to 75,238 units in May 2019.

Similarly, three-wheeler sales remained subdued last month at 41,508 from 51,446 units in May 2019. In May last year, retail sales stood at 5,215 units.

However, tractor sales increased last month to 52,487 units from 39,438 units in May 2019.

Regarding the sales outlook, Gulati said, as the Russian-Ukrainian war continues to create a mismatch between supply and demand, thus delaying the availability of PV, RBI has warned of an increase in sales. inflation because the increase in wholesale prices will be passed on to end consumers. “This will translate into lower disposable income, which will ultimately hamper auto sales.”

Therefore, the FADA continues to remain cautious about any further recovery in auto sales in the near term, he noted.

About the author