February retail passenger vehicles sales grow 11%, two-wheelers drop by 16%

Retail volumes of passenger vehicles (PV) swung back into the black in February reporting a growth of nearly 11 percent after January proved to be a disappointment.

According to data sent by the Federation of Automobile Dealers Association (FADA) PV retails ended February at 254,058 units while the same month last year saw sales of 229,734 units. There was a 4.4 percent decline in January.

The data which represents actual sales to consumers are collated in collaboration with the Ministry of Road Transport and Highways and is different from the data shared by the Society of Indian Automobile Manufacturers (SIAM) as that is based on sales to dealers also called wholesales.

According to individual sales data shared by each company there was 24 percent growth in February in wholesales of ten PV making companies controlling 97 percent of the domestic volumes. The gap in wholesales and retail for February could be because of the reason that four states – Andhra Pradesh, Madhya Pradesh, Telangana and Lakshadweep – are yet not on the VAHAN portal of the government.

Vinkesh Gulati, President of FADA said: “Passenger vehicles witnessed double-digit growth on a low base of last year as India started transitioning from BS-4 to BS-6 emission norms. This coupled with the global semiconductor outrage kept a waiting period of PV as high as 8 months. FADA survey showed that 50 percent PV dealers lost more than 20 percent sales due to non-availability of vehicles”.

Two-wheeler retails remained in the red for the second consecutive month. The industry saw a 16 percent decline in the volumes of motorcycles, scooters and mopeds during February at 1.09 million units as against 1.3 million units clocked in the same month last year. Wholesales during the same month, as per data shared by each company, was up 11 percent.

“Two-wheelers continued to see sluggish demand as the new wave of Covid in certain states kept customers away. Enquiry levels also narrowed as many educational institutions were still reluctant to open. Fuel prices are at a historic high and have put a dampener in sentiments. This, in turn, has pressed the brake on sale of the entry-level price-sensitive category”, Gulati added.

Commercial vehicle retail sales were down 30 percent in February to 59,020 units compared to the same month last year when the segment recorded sales of 83,751 units. The CV segment is one of the two heavily hit segment because of the pandemic, the other being the three-wheeler segment.

While auto loan rates are at a decade low level, rising fuel prices and the inevitable increase in costs due to regulatory reasons like mandatory passenger side fitment is bothering auto dealers. However, auto companies are hoping to keep the momentum going with the introduction of new models, many of which are lined up for the next few months.