When matched with June’19, total vehicle retail was down by -9 percent. PV and Tractor continued to show growth by rising 27 percent and 40 percent. For the first time, CV also increased by 4 percent. The two categories which continue to underperform were 2W and 3W which de-grew by -16 percent and -6 percent respectively.

The Federation of Automobile Dealers Associations (FADA) has released Vehicle Retail Data for June’22.

Highlights

1. On YoY basis, total vehicle retail for the month of June’22 increased by 27 percent. All categories were in green. 2W, 3W, PV, Tractors and CV were up by 20 percent, 212 percent, 40 percent, 10 percent and 89 percent respectively.

2. Though few categories are consistently showing recovery, full recovery is yet to be witnessed when compared to pre-covid times.

3. Overall Q1’22 grew by 64 percent when compared to Q1’21 which saw intermittent lockdowns, but de-grew by -8 percent when compared to Q1’19. Only PV and Tractor were in green for the entire quarter. 

4. Increased wholesale reflects ease in semi-conductor availability thus reducing supply side constraints going ahead.

5. High inflationary pressure becomes a cause of major concern.

Commenting on how June’22 performed, FADA President, Vinkesh Gulati said, “Auto Retail for the month of June’22 continued to show its positive run when compared YoY with June’21, a month which continued to face the brunt of covid.

When compared to June’19, a pre-covid month, overall sales were down by -9 percent. Apart from PV and Tractors which were already above pre-covid level for last few months and grew by 27 percent and 40 percent, CV for the first time showed a growth of 4 percent thus indicating recovery slowly creeping in for this segment. While 3W narrowed its de-growth and was at down by -6 percent, it’s the 2W segment which still remains the biggest cause of concern and is not picking as per expectation. The same was down by -16 percent.

Poor market sentiment especially in rural India, high cost of ownership, inflationary pressure and June generally being a lean month due to rains kept 2W sales at low speed. In the 3W category, a major shift has happened in electric category. Apart from this, permit issues and frequent price increase remained the biggest dampeners.

The PV segment continued to see robust growth. An increase in wholesale clearly shows that semi-conductor availability is now getting easier. Waiting period, especially in compact SUV and SUV segment continued to remain high. New vehicle launches are seeing robust booking thus reflecting healthy demand pipeline.

The CV segment showed strength for the first time as it grew by 4 percent when compared to June’19, a pre-covid month. Bus segment along with LCVs are showing good traction.”

Near Term Outlook

The Russia – Ukraine crises has increased inflationary pressure world over. RBI Governor during the recent Monetary Policy meeting has also flagged high inflation as a major cause of concern. In the past few months, prices of almost all essential items have moved northwards, thereby putting pressure on the common man’s household budget and thus reducing his disposable income. Additionally, the high fuel prices have had a spill over effect on transportation and made it expensive. This will have a negative effect on entry level PV as well as 2W segment which are generally dominated by first time buyers.

On the other hand, ease in availability of semi-conductors will see increased supply especially in PV segment and thus reduce waiting period.

If Rural India stabilises, Auto retail will enter festive season on a good note.

Key Findings from our Online Members Survey

Inventory at the end of June’22

a. Average inventory for Passenger Vehicles ranges from 15 – 20 days

b. Average inventory for Two – Wheelers ranges from 20 – 23 days

Liquidity

a. Neutral                   41.8 percent

b. Good                      40.0 percent

c. Bad                        18.2 percent

Sentiment

a. Good                     41.8 percent

b. Neutral                   41.8 percent

c. Bad                        16.4 percent

Expectation from July

a. Growth                     50.3 percent

b. Flat                         35.2 percent

c. De-growth                 14.5 percent

All India Vehicle Retail Data for June’22

All India Vehicle Retail Data for Q1 FY’22