The Federation of Automobile Dealers Associations (FADA) on Monday said it remains cautious for the year-end, as original equipment manufacturers (OEMs) migrate to manufacturing on-board diagnostics (OBD)-2-compliant vehicles (as per emission norms) which could see a steep price increase across all categories of vehicles.
In its monthly retail sales report, FADA said the immediate next month of festivities generally witnesses a certain amount of softness in sales, and also with year-end around the corner, many customers wait for vehicles that will be manufactured in the new year.
The way out
“While farmers will start receiving crop realisations, the overall sentiment continues to show some headwinds especially in the two-wheeler (2W) rural segment. For auto retails to show strength, the 2W segment will have to grow for at least 3-4 months over pre-Covid months to come out of the woods,” Manish Raj Singhania, President, FADA, said.
He said the commercial vehicle (CV) segment is anticipated to see continued demand due to rising infra projects and government spending. While the passenger vehicle (PV) segment continues to outperform, demand in entry level segment continues to show some softness.
Best festival season
On its monthly retail sales data, FADA said the total vehicle retail sales grew 48 per cent year-on-year (y-o-y) to 20,94,378 units in October compared with 14,18,726 units in October 2021. In the PV segment, retail sales grew more than 40 per cent to 3,28,645 units during the month (2,33,822 units).
Similarly, 2W sales grew 51 per cent to 15,71,165 units (10,39,845 units) and 3W and CV sales also grew by double digits.
FADA also noted that the festival season this year turned out to be the best for the industry in the last four years as total vehicle retails were up 28 per cent.
PV sales grew more than 34 per cent to 4,56,413 units (3,39,780 units in same period last year). Two-wheeler sales also grew 26 per cent to 21,55,311 units (17,05,456 units).
“With most of the month under festive period, the sentiments were extremely positive across all categories of dealership outlets. Even when compared to pre-Covid month of 2019, overall retails for the first time closed in green, growing 8 per cent,” Singhania added.