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The outlook for auto retail signals a mixed trend in July, with the two-wheeler (2W) market anticipating continued supply challenges and economic pressures, despite the roll-out of new schemes and expectations of sentiment getting a monsoon boost, the Federation of Automobile Dealers’ Associations (FADA) said on Thursday.
The cutback in FAME subsidies has cast a shadow over electric vehicle (EV) sales, while the three-wheeler market predicts growth, underpinned by favourable market responses and rising demand.
“The passenger vehicle (PV) segment faces a dichotomy of factors. While the launch of new models and a potential rise in rural sales lend optimism, dealers will have to navigate inventory pressures from original equipment manufacturers (OEMs) and demand-supply mismatches, impacting profitability,” said Manish Raj Singhania, President, FADA.
However, the sector could receive a festive boost in end-August. The commercial vehicle (CV) sector is looking at positive market sentiment and potential monsoon impacts, with demand spurred by infrastructure projects and improved financing options, he said.
“On the agricultural front, an erratic monsoon has hindered sowing operations. The delayed and uneven rains might reduce crop yields, shorten crop cycles and delay future crop arrivals. Such developments may affect automobile sales, particularly in rural areas, where a weak agricultural season could lead to a reduction in disposable income, thus affecting demand for two-wheelers and entry-level cars,” Singhania said.
Sharing monthly retail sales data, he further said, “Yet, upcoming rains may potentially boost agricultural prospects, revive rural demand, and positively influence automotive sales. FADA, hence, remains cautiously optimistic about the near-term outlook.”
Passenger vehicle sales up 5 per cent
According to FADA’s monthly retail sales data, PV sales grew by around 5 per cent year-on-year (YoY) to 2,95,299 units in June, as compared with 2,81,811 units in the corresponding month last year.
2W sales grew by around 7 per cent YoY to 13,10,186 units during the month, as against 12,27,149 units in June 2022.
3W sales grew the highest by 75.48 per cent YoY to 86,511 units in June, as compared with 49,299 units in the same month of the previous year.
Similarly, tractor sales grew by 41 per cent YoY to 98,660 units during the month, as compared with 69,952 units in June last year.
CV retail sales grew marginally (0.44 per cent) to 73,212 units last month, as compared with 72,894 units in June 2022, the FADA data showed.
The grand total of all categories grew by 9.57 per cent YoY to 18,63,868 units in June, as compared with 17,01,105 units in the corresponding month last year.
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