The Federation of Automobile Dealers Associations (FADA) has unveiled the Vehicle Retail Data for July’23, shedding light on the recent trends and performance within the Indian auto retail sector.
Reflecting on July 2023, FADA President, Mr Manish Raj Singhania, stated, “Auto retail grew 10% YoY in July, mirroring last month’s trend. However, the MoM decline continued highlighting short-term slowdowns. On a YoY basis, segments like Two-Wheelers (2W), Three-Wheelers (3W), Passenger Vehicles (PV), Tractors (Trac), and Commercial Vehicles (CV) grew at rates of 8%, 74%, 4%, 21%, and 2% respectively. On an MoM basis, apart from the 3W segment’s 9% growth, other segments experienced declines. Compared to pre-COVID figures, auto retail decreased by -13%, with significant drops in 2W and CV at -23% and -4%.”
July witnessed a record-breaking performance in the Three-Wheeler (3W) segment, with sales reaching 94,148 units, marking a remarkable 74% YoY and 9% MoM increase, surpassing the previous high in March’23.
Despite challenges such as heavy monsoons and a shift towards electric vehicles due to high fuel prices, the Two-Wheeler (2W) segment exhibited resilience in July ’23, showcasing increased demand and trust in established brands. The surge in 3W sales indicates a growing interest in electric vehicles within the industry, highlighting its potential. However, addressing concerns related to OEM support and dealer engagement remains a crucial aspect.
Key Highlights from the Report:
- July’s Auto Retail Performance: Auto retail sales in July maintained a steady 10% YoY growth, mirroring the previous month. All vehicle categories recorded positive figures: Two-Wheelers (2W) at 8%, Three-Wheelers (3W) at 74%, Passenger Vehicles (PV) at 4%, Tractors (Trac) at 21%, and Commercial Vehicles (CV) at 2%.
- Monthly Analysis Reveals Mixed Results: Despite consistent YoY growth, the month-on-month trend observed a 5% decline in retail sales. The exception was the 3W segment, which grew by 9%, while categories like 2W, PV, and Trac registered reductions of 6%, 4%, and 8% respectively. CVs closed nearly flat at -0.2%.
- Performance Versus Pre-COVID Levels: When compared with pre-COVID figures, overall retails showed a 13% decline. The 2W segment faced a significant 23% dip, while CVs also underperformed with a 4% contraction.
- Three-Wheeler Segment Shines: July was particularly commendable for the 3W category, which registered an all-time high sale of 94,148 units, translating to a 74% YoY and 9% MoM growth.
- Inventory Insights: The inventory for Passenger Vehicles has surpassed the 50-day mark and currently hovers between 50-55 days, suggesting inventory build-up in anticipation of the forthcoming festive season.
- Agricultural Forecast: The Indian Meteorological Department (IMD) predicts below-average rainfall in August, raising concerns about reduced kharif crop yields and its potential impact on rural demand.
