Domestic automobile retail sales rose 10 percent in July from a year earlier, driven by purchases across segments including passenger vehicles and two-wheelers, dealers said.
Total vehicle retail sales rose to 1.77 million last month from 1.6 million in the year-ago period, the Federation of Automobile Dealers Associations (FADA) said on August 7.
Passenger vehicle sales increased 4 percent to 284,064 units as against 273,055 units in July 2022 but fell 3.8 percent from the previous month. Despite the consistent YoY growth, there was a 5 percent month-on-month decline in overall vehicle retail sales. The three-wheeler segment was an exception, with an 8.8 percent MoM growth.
“Auto retail grew 10 percent YoY in July, mirroring last month's trend. However, the MoM decline continued, highlighting short-term slowdowns,” FADA president Manish Raj Singhania said in a statement. “PV sales in July '23 were a mix of challenges and triumphs. The month saw a surge in orders and timely OEM supplies, especially with the introduction of new products. However, severe monsoons and flood-like situations, especially in North India, impacted sales. SUVs continued to remain a popular choice."
Two-wheeler sales climbed 8.15 percent to 1.22 million last month from 1.13 million units a year earlier. Three-wheeler sales surged 74 percent to 94,148 units from 54,000 units.
Cautious, hopeful
Tractor sales jumped 21 percent year-on-year to 90,765 units while commercial vehicle sales rose 2 percent to 73,065 units.
"Despite challenges like heavy monsoons and a tilt towards EVs due to high fuel prices, 2W showed resilience in July '23, with increased demand and trust in reputable brands. The 3W segment's record numbers indicate industry potential and a growing EV interest. Yet, addressing issues like OEM support and dealer engagement remains crucial," added Singhania.
Commercial vehicle sales rose 2 percent to 73,065 units from a year earlier. Singhania said the CV segment showed mixed dynamics.
"Despite robust stock availability and growth in areas like school buses, challenges from erratic weather and high vehicle costs affected demand. However, infrastructure project boosts remain a silver lining," noted Singhania.
FADA, which represents over 15,000 automobile dealers, maintained that it remains cautious in terms of business outlook.
"While caution remains the operative word in the short term, FADA is hopeful about retail growth prospects, especially with the festive season on the horizon," the association said. “The entry-level category in the two-wheeler segment continues to be a cause for concern. In the CV space, there are apprehensions regarding streamlined loan disbursements for buyers.”
The inventory level in passenger vehicles breached the 50-day mark, possibly in anticipation of the upcoming festival season, FADA said. The slowdown in entry-level car vertical remains, it said.
The association said the larger concern is the projection of below-average rainfall in August, potentially leading to lower crop yields, which could impact purchasing power, especially in rural regions, FADA added
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