Automobile retail sales jump 23% in June on strong pent-up demand: FADA

India vehicle sales in June grew 23 percent to 1.21 million units as the re-opening of showrooms in most states except those in the Southern parts of the country helped bring pent-up demand.

Passenger vehicle sales during June jumped 43 percent to 184,134 units compared to the same month last year, according to data provided by the Federation of Automobile Dealers Association (FADA).

Data from four markets – Andhra Pradesh, Madhya Pradesh, Lakshadweep and Telangana - was not available. Retail sales represent the vehicles that are registered or actual sales to customers.

FADA President Vinkesh Gulati said: “The month of June witnessed re-opening for most of the states except the ones in South. Due to this, the industry witnessed a high pent-up demand. While all the categories were in green, PVs maintain good demand as customers continued to show keenness in vehicles for observing social distancing and safety of their families.”

Two-wheeler sales rose 17 percent to 930,324 units during June as against the same month last year. Commercial vehicle (CV) volumes also showed a marked rise in volumes during June. CV sales jumped 236 percent to 35700 units during June. Tractor volumes rose 14 percent during June to 52,261 units

“Two-wheeler category though in green has witnessed a softer recovery as the rural market is taking time to get back from post COVID stress. Commercial vehicle segment has seen staggering growth over last year, though on a very low base as there were product shortages due to BS-6 transition,” FADA added.

Following the resumption of production by most companies after a lull in May the average inventory for PVs ranged between 30 to 35 days. While for two-wheelers it ranged between 20 to 25 days, as per FADA.

FADA’s outlook states that the positive momentum of June has carried into July and with southern India opening up there are expectations of a further pickup in demand. However, continued global semi-conductor shortage is causing a demand-supply mismatch while the new virus mutants and a prediction of the third wave in August are affecting sentiments.