Vehicle retail for June 2021 up by 22.62 per cent: FADA

Total vehicle retail for the month of June 2021 showed a rise by 22.62 per cent year on year on a low base, according to the latest report released by the Federation of Automobile Dealers Association on Thursday. However, when compared to June 2019, which was a regular pre-covid month, retail is still down by 28.32 per cent.

FADA also revealed that on a year on year basis, all categories were in green with two-wheelers up by 17 per cent, three-wheelers up by 22 per cent, passenger vehicles up by 43 per cent, tractors up by 14 per cent and commercial vehicles up by a massive 236 per cent (on a very low base due to non-availability of BS-6 vehicles).

FADA said that with Southern India opening up, further pickup in demand can be expected.

FADA President, Vinkesh Gulati said: “June witnessed re-opening for most of the states except the ones in the South. Due to this, the industry witnessed a high pent-up demand which was stuck in the system because of state-wide lockdowns.

“While all the categories were in green, passenger vehicles maintain to see good demand as customers continued to show keenness in vehicles for observing social distancing and safety of their families. Two-wheeler category though in green have witnessed a softer recovery as the rural market is taking time to get back from the post-Covid stress. The commercial vehicle segment has seen a staggering growth over the last year, though on a very low base as there were product shortages due to BS-VI transition.

“Overall, the industry is still not out of the woods. When compared to June 2019, we are still in red by -28 per cent with three-wheelers and CVs taking the maximum hit as they are down by 70 per cent and 45 per cent respectively. Only tractors continue to grow as they were up 27 per cent compared to June’19,” he added.

Commenting on the future, Gulati said: "The positive momentum from June carries forward to July. With southern India opening up, we can expect further pickup in demand. On a longer term, the auto industry is yet to see retail numbers comparable to FY 19.

“The continued global semiconductor shortage is impacting demand – supply mismatch thus restricting the growth of passenger vehicles. On one hand, while the new virus mutants and a prediction of the third wave in August are affecting sentiments, the revival of the monsoon in July after a pause of two weeks and a better vaccination drive rate continues to build some hope," he added.

“We will therefore have to wait and watch how the overall economy shapes up over the next couple of months. We hence see demand to be a mixed bag and hope that recovery is back on track by the time Navaratri and Diwali knocks on our door," he further commented.

Inventory at the end of June 2021:

Average inventory for passenger vehicles ranges from 30-35 days

Average inventory for two-wheelers ranges from 20-25 days