The festive season kicked off on a high note for auto dealers as vehicle sales recorded a healthy growth of 11% on year-on-year basis in September 2022 despite the inauspicious period of Shradh, the data shared by national auto retail body FADA (Federation of Automobile Dealers Associations) said. FADA represents over 15,000 automobile dealers having 26,500 dealerships, which employ 4 million people at dealerships and service centres.

Of the total vehicle sales, PV (passenger vehicles) sales grew a significant 9.71% YoY, thus continuing its ‘Bolt’ run, says the association. This segment grew 44% when compared to September 2019, a pre-Covid month. Two-wheeler, three-wheelers and commercial vehicles also recorded high growth of 9%, 72% and 19%, respectively, in September. Except tractors, which decreased by 1.5%, all the other categories were in green.

Though the dealer sales recorded growth in most segments as compared to the pre-pandemic level of September 2019, except two-wheelers, the total sales are yet to enter the green territory. The total vehicle retail continued to be lower by 4% when it comes to September 2019. The PV segment sustained its healthy run by growing 44%. Similarly, growth in three-wheelers, tractors and commercial vehicles also closed in green by increasing 6%, 37% and 17%, respectively. The two-wheeler segment, however, continues to be a drag as it fell by 14%, primarily due to high input costs. Notably, the prices of two-wheeler companies were raised by 5 times in the past year.

The auto retailers body says sales in some states like Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh and Jharkhand showed weakness, with lower contribution to auto retail in entry level two-wheeler and PV categories.

Showing optimism on a rise in demand amid the festive season, the body says the overall retail in PV is expected to be at a “decade high” but the 2W category still continues to be the pain point for the industry. In September 2022, 16 days marked the inauspicious period of Shradh (a.k.a Pitru Paksha) from September 10-25, while the festive period started with Navratri on September 26. Due to this, the full potential for the month was not fully realised.

"The RBI's fight with inflation saw rate hikes, which continued to make vehicle loans expensive. While India is showing revival signs, Bharat is yet to perform. Two-wheelers, especially entry level vehicles, are finding few buyers, thus dragging the entire segment," says Manish Raj Singhania, president, FADA.

He said the three-wheeler segment continues to see a structural shift from ICE to EV, which shows in the extremely healthy growth rate of e-rickshaws. Reasons like better availability of vehicles, festivities, bulk fleet purchase and the government’s continued push for infra development made CV and HCV segments shine.

As per FADA, the waiting period still continues to range between 3 months to 24 months, especially for SUVs and compact SUVs. In its outlook, FADA says October will see auto retail on high grounds, with 24 days of festive season out of the total 31 days. Dealers anticipate this to be the “best festive in a decade” for the PV segment. While semiconductor supply continues to ease, FADA has requested original equipment manufacturers (OEMs) to match supply as per the demand.

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