Vehicle Retail Sales Fall 5.27% As Two-Wheelers, Tractors Drag: FADA

New Delhi: Overall vehicle retail sales declined 5.27% in September on a yearly basis, dragged by a double-digit slump in sales of two-wheelers and tractors. Federation of Automobile Dealers Associations or FADA, said, two-wheeler segment registered a fall of 11.54% and tractor sales dropped by 23.85% in September, 2021, as against the same period last year.

However, passenger vehicle (PV) sales and commercial vehicle retail business jumped 16.3% and 46.6% respectively.

Commenting on this year's September numbers, FADA President, Vinkesh Gulati said, "Auto retail has taken a pause as overall sales were down by 5%." He added that on a long term basis, except tractors which grew by 19% and PV which has almost reached pre-Covid levels (down nearly 2%), all the other segments were in red."

The two-wheeler category continued to play spoilsport as entry level segment is yet to witness healthy growth, the auto dealers' body stated.

FADA has requested two wheeler makers to dole out special schemes to aid revival in the entry level two-wheeler (below 125 cc) segment as the segment is under severe pressure.

It noted that the "segment's performance is now becoming critical for the overall two-wheeler to come back on the path of recovery."

Though, the three-wheeler segment, FADA said, is now showing clear signs of tactical shift from internal combustion engine (ICE)-powered vehicles to electric vehicles as the ratio has hit a 60:40 split.

Near Term Outlook

FADA said, "The near term outlook for this year's festive season will be a mixed bag. While two-wheeler dealers have seen an increase in the inventory, PV inventory is at the lowest during this fiscal due to the ongoing semiconductor crises."

It further added, "The chip shortage looks less likely to ease within next two quarters. As a result, PV sales is likely to stagnate going ahead even though OEMs are coming ahead with new launches to keep the customer excited. With skyrocketing fuel prices and a drop in purchasing power, entry level customers in rural India are keeping themselves away from fulfilling their mobility needs."