Vehicle sales show positive trend in July: FADA

Vehicle sales showed a positive trend and grew in the month of July, according to the latest data released by the Federation of Automobile Dealers Association (FADA).

Total vehicle retails for the month of July ’21 rose by 34.12 per cent on YoY basis, according to FADA. When compared to July ’19 (a regular pre-covid month), recovery is visible as the deficit reduces to low double digits of -13.22 per cent.

On a YoY basis, all categories were in green with two-wheelers up by 28 per cent, three-wheelers up by 83 per cent, PV up by 63 per cent, tractor up by 7 per cent and CV up by 166 per cent.

After tractors, passenger vehicles for the first time showed strong numbers by clocking 24 per cent growth when compared to pre-covid month of July ’19.

“FADA has been raising red flag about semiconductor shortage since quite some time. The situation is now becoming grave with ever-increasing supply-side constraints," FADA said in a statement.

“The delta variant and a possibility of a third wave continues to remain a threat for stable auto retails." It added.

FADA President Vinkesh Gulati said: “With entire country now open, July continues to see robust recovery in Auto Retails as demand across all categories remain high. The low base effect also continues to play its part.

“With all categories in green, CVs continue to see increase in demand specially in M&HCV segment with the Government rolling out infrastructure projects in many parts of the country.

“PVs witnessed high demand specially with buzz around new launches and compact SUV segments. The waiting period due to supply side constraints have been persisting since quite a few months and is now becoming a deep routed issue for OEM’s.

“The two-wheeler segment though continues to see positive demand YoY, the rate of recovery remains sluggish as customers at the bottom of the pyramid suffer with poor disposable income and rural markets where covid cases were high during the second wave.

“Auto retails have now started narrowing the deficit when compared to pre-covid months. When compared to July ’19, the gap reduces to low double digits of -13 per cent. With tractor retails already above pre-covid levels during the last month, passenger vehicles for the first time have reached the same by growing 24 per cent,” FADA added.

Commenting on the month of August, FADA said: “The month of August begins on a positive note as demand and enquiry levels continue to improve across all categories. With IMD forecasting a normal monsoon during August-September period, sowing operations will pick up gradually. This will have a rub off effect on rural sales especially in tractor segment.

“On the other hand, the global semiconductor shortage is now becoming a deep routed problem for the PV segment which is now above the pre-pandemic mark. FADA has been raising red-flag since quite some time on demand-supply mis-match.

“In an internal survey conducted by FADA, 60 per cent of dealers of PV segment said that they have at least two months waiting period for select variants. Around 35 per cent dealers also said that the waiting period is more than four months among select variants.

“The delta variant of Covid if goes out of proportion can be another deterrent and put brakes on auto retail’s recovery with India entering the festive season months," it added.