Retail Auto Sales Fell By 10.7% In January, Says Dealers Body

Automobile companies' retail sales fell by 10.70 percent in January 2022 compared to the corresponding period of last year, according to data released by the Federation of Automobile Dealers Associations (FADA).

FADA is the apex national body of the automobile retail industry in the country, representing 26,500 dealerships across India.

On a year on year (YoY) basis, three-wheeler and commercial vehicles sales were up by 30 percent and 20.5 percent respectively, while two-wheeler vehicles, passenger vehicles and tractor sales fell by 13 percent, 10 percent, and 10 percent respectively. The non-availability of passenger vehicles due to semi-conductor shortage continues to create problems.

While commercial vehicles and especially heavy commercial vehicles (HCVs) continue to perform well in pockets, the two-wheelers continue to show weak performance due to rural India remaining in distress. The passenger vehicle inventory continues to remain at a historic low of 8-10 days while two-wheeler inventory has reduced from alarming levels to 25-30 days.

Government's plan of developing 25,000 km of new highways will further build traction in India's infrastructure spending and have a positive effect on the commercial segment, said FADA.

Commenting on the performance of the association in January 2022, FADA president, Vinkesh Gulati said, "the month of January continues to show weak performance as overall retails on a YoY basis fell by 10.7 percent while three-wheeler and CV continue to remain in green with a growth of 30 percent and 20.5 percent."

"The two-wheeler, passenger vehicles and tractors closed in negative with negative growth of 13 percent, 10 percent, and 10 percent respectively. Auto retails weak performance of 18.4 percent compared to January 2020 (pre-Covid month) continues to show that India is yet to recover from the coronavirus pandemic's effect which gripped the world two years ago," he said.

Despite demand, passenger vehicles segment continues to face the brunt of semi-conductor shortage resulting in the absence of a healthy inventory.

Speaking about the two-wheeler category, Mr Gulati said that rural distress coupled with price rise and the Omicron variant of Covid-19 negatively impacted this segment. With the revival in the economy, the commercial vehicle segment continues to show YoY growth, especially in the heavy commercial vehicle category.