Early Start To Festive Season Boosts Retail Auto Sales In September 2022

Sales of automobiles at dealership rose last month, aided by an early start to the festival season.

India's retail auto sales rose 10.9% year-on-year to 14.64 lakh units in September, according to Federation of Automobile Dealers Associations. The volumes, however, were still 3.8% lower than the corresponding pre-pandemic period in 2019.

“September witnessed both, the inauspicious period of Shradh (Pitru Paksha) from Sept. 10-25 and festive period which began with Navratri on Sept. 26,” Manish Raj Singhania, president at FADA, was quoted as saying in a media statement. “Due to this, the full potential for the month was not realised as it should have been.”

The two-wheeler segment is “yet show signs of any revival”. Its sales rose 9% over the year earlier, but were 14% lower than the corresponding period in 2019.

“Due to increased input costs, two-wheeler companies raised prices five times in past one year. Apart from this, the RBI's fight with inflation saw rate hikes which continued to make vehicle loans expensive,” Singhania said in the statement. “While India is showing revival signs, Bharat (rural areas) is yet to perform. Two-wheelers, especially entry level vehicles, are finding extremely less buyers, thus dragging the entire segment.”

Tractor sales fell 1.5% year-on-year in September.

Sales of passenger vehicles rose 9.7% over a year earlier and 44% over the pre-pandemic September. That, according to FADA, was because better availability of vehicles, new launches and feature-rich products ensured customers get their favourite vehicles during the auspicious period.

The waiting period for the preferred SUVs and compact SUVs, the dealers' lobby said, continues to range between three and 24 months.

An 18.9% jump in commercial vehicle sales was supported by better availability of vehicles, festivities, bulk fleet purchases and the government's focus on infrastructure development. Also, an increase in demand for public transport and rickshaw service buoyed three-wheeler sales. The three-wheeler segment continues to see structural shift from internal combustion engine to electric vehicles, the statement said.

Outlook

FADA expects robust October retail sales, with 24 days of pre-Diwali buying period. Dealers anticipate this to be the “best festive in a decade for PV segment”.

Enquiries for two-wheelers, too, are showing a positive movement. If this segment, especially the entry-level market, improves its growth to low double digits, overall auto retail sales will see higher growth compared with the last two festivals, FADA said. But it may still lag the pre-Covid numbers of October 2019.