While two-wheeler sales remain down and a major cause for concern, demand for cars is keeping sentiment going in the Indian automotive space.
The Federation of Automobile Dealers Associations (FADA) released vehicle retail data for the month of June on Tuesday and highlighted the gradual return to some form of normalcy in the Indian auto market, with passenger vehicles opening the way. While the high wait time for some models remains a challenge, FADA notes that new model launches last month have boosted vehicle retail sales.
Data released shows that all categories of India’s automotive industry – two-wheelers, three-wheelers, passenger vehicles, tractors and commercial vehicles – recorded growth last month compared to the Covid-hit June 2021. -19. passenger vehicles last month were up 40% from June 2021. But while the recovery in retail sales from the same period last month was in line with forecasts, FADA specifically notes how launches new models are helping to boost the passenger vehicle segment. “The PV segment continued to experience robust growth. An increase in wholesale clearly shows that the availability of semiconductors is now becoming easier,” said Vinkesh Gulati, FADA Chairman. “New vehicle launches are seeing robust bookings, reflecting a healthy demand pipeline.
Most of the nation’s automakers are reporting strong demand and pointing to component shortages as a stumbling block. But if the situation improves, it could be a major boost for companies that have at least two months of intact order book. The FADA, however, still points to high fuel prices and inflationary pressures as potential pain points. But the impact of these will likely be felt the most in the two-wheeler segment. Poor market sentiment, especially in rural India, high cost of ownership, inflationary pressure and generally lean June due to rains kept 2W sales at low speed,” Gulati noted.
All eyes would now be on developments in July and August, as the following festive period is when the performance of the automotive industry really signals consumer sentiment and makes a holistic impression.
Date of first publication: Jul 05, 2022, 10:24 a.m. IST