The latest data from the Federation of Automobile Dealers Associations (FADA) claims auto retail sales in India experienced a 10 per cent year-on-year (YoY) growth in May.
The growth was driven across categories as reflected in the data. For instance, while two-wheelers (2W), three-wheelers (3W) saw a growth of 9 per cent and 79 per cent respectively, passenger vehicles (PV) and commercial vehicles (CV) grew by 4 per cent, and 7 per cent, respectively.
"May has been an encouraging month for the auto retail industry, demonstrating a robust 10 per cent YoY growth across all vehicle categories. We have witnessed a resurgence in the 2W, 3W, PV, Tractor, and CV segments with growth rates of 9 per cent, 79 per cent, 4 per cent, 10 per cent, and 7 per cent respectively. While there has been a slight -2 per cent decline compared to pre-Covid levels, the overall retail figures have shown improvement," Manish Raj Singhania, FADA President said.
Interestingly, May also showcased an increased penetration of electric vehicles (EVs), accounting for 8 per cent of total sales, with two-wheelers contributing 7 per cent, three-wheelers contributing 56 per cent, commercial vehicles contributing 0.5 per cent and passenger vehicles contributing 2.5 per cent respectively.
"Electric Vehicles (EVs) made impressive strides this month, contributing to 8 per cent of the total vehicle retail. This was buoyed by a surge in two-wheelers EV sales that contributed 7 per cent and three-wheelers EV sales contributing a substantial 56 per cent of their respective total sales. The CV and PV categories also marked their presence in the EV landscape, with respective contributions of 0.5 per cent and 2.5 per cent," Singhania added.
The auto retail sector faces diverse challenges across the 2W, CV and PV segments, as per FADA. For 2W, seasonal factors could boost demand, but concerns like weather-induced walk-in reductions, inventory, and regulatory norms persist. The CV sector anticipates improved vehicle availability but concerns about RDE norms and seasonal effects may impact sales. The PV sector expects increased demand, particularly for new models, compact and full-sized SUVs and EVs, but inventory pressure and right model availability could pose challenges.
"The anticipated stable interest rates by RBI's Monetary Policy Committee could maintain vehicle demand and positively impact auto sales. However, supply chain issues, demand-supply dynamics, and regulatory changes also play a role in shaping the auto retail outlook," FADA said.
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