Automobile retail sales gather pace in June as states ease restrictions: FADA

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Automobile retail sales witnessed a healthy recovery in June as compared to May as various states eased Covid-related restrictions, paving the way for improvement in vehicle registrations across various segments, automobile dealers’ body FADA said on Thursday. Passenger vehicle (PV) retail sales rose to 1,84,134 units last month against 85,733 units in May this year as the Covid-19 situation improved across the country.

According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,295 out of the 1,498 regional transport offices (RTOs), two-wheeler sales rose to 9,30,324 units last month as compared to 4,10,757 units in May. Similarly, commercial vehicle sales increased to 35,700 units as against 17,534 in May. Three-wheeler sales surged to 14,732 units in June from 5,215 units in May. Tractor sales too witnessed an increase in registrations at 52,261 units as compared to 16,616 units. Total registrations across categories increased to 12,17,151 units as against 5,35,855 units in May.

“The month of 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,” FADA President Vinkesh Gulati noted. The passenger vehicle segment saw good demand as customers continued to show keenness in vehicles for observing social distancing and the safety of their families, he added.

Two-wheeler sales

The two-wheeler category also witnessed a slow recovery as rural markets are taking time to get back to normal from Covid related disruptions. “Overall, the industry is still not out of the woods. When compared with June 2019, we are still in red (-28%) with three-wheelers and CV segments taking the maximum hit as they are down by -70 and -45%, respectively. Only tractors continue to grow as the sales were up 27% as compared to June 2019,” Gulati said. He noted that the positive sales momentum is expected to carry forward to July. “With South India opening up, we can expect a further pickup in demand. However, the industry is yet to see retail numbers comparable to FY19,” Gulati said.

He added that the continued shortage of semiconductors was restricting the growth of passenger vehicles. “On one hand, while the new virus mutants and a prediction of a third wave in August are affecting sentiments, the revival of monsoons in July after a pause of two weeks and a better vaccination drive rate continues to build some hope,” Gulati said. He said that the average inventory for the passenger vehicles stood between 30-35 days, while that of two-wheelers ranged between 20-25 days at the end of June. FADA India represents over 15,000 automobile dealers having 26,500 dealerships across the country.