Auto sales up 34% in July, passenger vehicles up from new launches


The Federation of Automobile Dealers Associations (FADA) said the delta variant of COVID-19 and the possibility of a third wave continue to threaten the recovery of the auto sector.

Total vehicle sales for the month of July were up 34.12% year on year (year over year), and all categories were in the green with two-wheelers (2W) up 28%, three-wheelers (3W) up 83%, passenger vehicles (PV) up 63% among others, according to a report from the Federation of Automobile Dealers Associations (FADA).

“With the whole country now open, July continues to see a strong recovery in automotive retailing as demand across all categories remains high. The weak base effect also continues to play its role. PV is in high demand, especially with the buzz around new launches and compact SUV segments, ”said FADA President Vinkesh Gulati. However, the waiting period for a vehicle due to supply side constraints has persisted for several months and is now becoming a deeply rooted problem for original equipment manufacturers, he added.

In July, among passenger vehicles, Maruti Suzuki India Ltd recorded sales of 1,14,294 vehicles, representing 43.67% market share; among two-wheelers, Hero Motocorp Ltd sold 4,01,904 vehicles, garnering a 35.48% market share; while among three-wheelers, Bajaj Auto Ltd recorded sales of 10,039 vehicles, garnering 35.98% market share.

“The 2W segment continues to see positive year-over-year demand, the recovery rate remains slow as customers at the bottom of the pyramid suffer from low disposable income and rural markets where COVID-19 cases were high during the second wave “, according to FADA. Compared to months before COVID, the gap in retail auto sales has started to narrow and now stands at -13% from July 19, according to FADA data.

Outlook

“August starts off on a positive note as demand and survey levels continue to improve across all categories. With the IMD forecasting a normal monsoon during the August-September period, planting operations will gradually resume. This will have a wiping effect on rural sales, especially in the tractor segment, ”FADA said in a statement.

However, the global semiconductor shortage is now becoming a serious issue for the PV segment which is now above the pre-pandemic mark, according to FADA, which has been raising a red flag for some time over the mismatch between the ‘Offer and demand.

In an internal survey conducted by FADA, 60% of resellers in the PV segment said they had at least two months of waiting time for certain variants. Another 35% of dealers said the waiting period is more than four months among the selected variants.

FADA added that the delta variant of COVID-19 and the possibility of a third wave continue to threaten the recovery of the automotive retail sector as India enters the months of the holiday season.


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