October 2022 to be BEST year for auto sales in this decade: Report
As per the report, sales of two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), and commercial vehicles (CV) went up 9 percent, 72 percent, 10 percent, and 19 percent, respectively.
- The sales of 3W are shifting from ICE to EV
- This could be the best year for auto sales
- 2W companies raised prices by 5 times in the past year
The Federation of Automobile Dealers Associations (FADA), the total retail sales of automobiles increased by 11 percent year over year during September 2022, as per a report. According to FADA's report, Vehicle Retail Data for September 2022, October will be a banner month for the auto industry, with 24 of the month's total 31 days dedicated to celebrations. According to the survey, dealers predicted that this holiday season would be the best for the passenger vehicle (PV) market in ten years due to expecting even greater sales during the month.
The report said all the other categories were in green except for tractors, which decreased by 1.5 percent. The sales of two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV), and commercial vehicles (CV) went up 9 percent, 72 percent, 10 percent, and 19 percent, respectively.
Compared with September 2019, a pre-Covid month, total vehicle retail sales continued to be lower by 4 percent. PV segment sustained its healthy run by growing 44 percent. Similarly, growth in 3W, tractor and CV also closed in the green by surging 6 percent, 37 percent, and 17 percent, respectively. It is only the 2W segment which continues to be a drag as the same fell 14 percent. Rural India in states like Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh, and Jharkhand showed a weakness with a lower contribution to auto retail, especially in the entry-level -- 2W and PV category, the report said. While overall retail in PV will be at a decade high during this festive season, it is the 2W category where the auto industry continues to pin its hope for showing healthy growth.
FADA President Manish Raj Singhania said, "Auto retail for the month of September 2022 saw an overall growth of 11 percent. September witnessed both the inauspicious period of Shradh from September 10-25 and the festive period, which began with Navratri on September 26. Due to this, the full potential for the month was not realised as it should have been." The 2W segment showed a growth of 9 percent y-o-y but fell 14 percent from September 2019.
Due to increased input costs, 2W companies raised prices by 5 times in the past year. Apart from this, the Reserve Bank of India's (RBI)`s fight with inflation saw rate hikes, which continued to make vehicle loans expensive. The report said while India was showing revival signs, Bharat was yet to perform, and 2W, especially the entry-level vehicles, are finding extremely less buyers, thus dragging the entire segment.
The FADA report said that the 3W segment continued to see a structural shift from internal combustion engine (ICE) to electric vehicle (EV). This is also reflected in an extremely healthy growth rate of e-rickshaw. Apart from better availability of vehicles with a full range of products, including alternate fuels, customers have started using public transport and rickshaw service, thus fuelling demand in this segment.
While the CV segment grew 19 percent, it is the heavy commercial vehicle (HCV) segment which showed a healthy growth of 40 percent y-o-y, the FADA report said. Reasons such as better availability of vehicles, festivities, bulk-fleet purchases, and the government`s continued push for infrastructure development made this segment shine.
The report also added that the PV segment continued its Bolt` run by showing a 10 percent y-o-y growth and 44 percent when compared to September 2019, a pre-Covid month. The report said: "Better availability due to easing semiconductor supply, new launches, and feature-rich products kept customers glued to dealerships for getting their favourite vehicles during the auspicious period. The waiting period continues to range between three months and 24 months, especially for sport utility vehicles (SUVs) and compact SUVs, which have become the absolute choice for today`s customers."
(With inputs from ANI)