Automobile retail sales see 10% growth in August, passenger vehicle sector grows 6.5%: FADA

The automotive retail sector in August registered a robust YoY growth of 9 per cent, albeit marginally lower than previously reported figures. The uptick was consistent across multiple vehicle categories, with 2-wheelers seeing a 6 per cent increase, passenger vehicles at 6.5 per cent, tractors rising 14 per cent, and commercial vehicles up by 3 per cent, recent data from Federation of Automobile Dealers Associations stated.

Sequentially, the industry saw a 3 per cent growth in total auto retail sales, although the tractor segment experienced a substantial 19 per cent contraction. Passenger vehicle sales in August stood at 3.15 lakh units.

Compared to pre-pandemic metrics, the overall retail landscape exhibited a modest 1 per cent growth, indicating nascent signs of recovery. Despite this, the 2W category remains in a subdued state but shows a reduced weakness of -11 per cent, signalling a gradual improvement in rural markets.

Two-wheeler sales saw a jump of 6 per cent to 12,54,444 units as compared with 11,80,230 units in the same month last year.

Commercial vehicle registrations increased by 3 per cent to 75,294 units last month from 72,940 units in the same month last year.

Tractor sales jumped 14 per cent to 73,849 units in August as against 65,018 units in the year-ago period.

Three-wheeler retail sales saw a jump of 66 per cent to 99,907 units in August from 60,132 units in August 2022.

"Auto Retail in August witnessed a promising 9% YoY growth, maintaining momentum similar to the preceding month. Concurrently, a 3% MoM uptick suggests a reversal in short-term trends. On a YoY basis, comprehensive growth was observed across multiple segments, 2W at 6%, 3W at 66%, PV at 6.5%, Trac at 14%, and CV at 3%. During MoM, all segments experienced growth, with the exception of tractors, which saw a 19% decline. When compared against pre-COVID benchmarks, the auto retail sector indicated a modest 0.8% improvement, led by 2Ws recouping lost ground and mitigating the de-growth by 11%," said Manish Raj Singhania, FADA President.

The onset of the festive season, beginning with Onam, has uplifted market mood, improved liquidity and eased earlier bottlenecks in the supply chain across all categories, he added.

FADA said the outlook for September remains 'cautiously optimistic', shaped by a multitude of factors that vary across vehicle segments.

FADA said it is alarming that inventory levels have exceeded the 60-day supply for the first time, even before the onset of the Navratri-Diwali festivities—a trend that necessitates vigilant monitoring by PV original equipment makers (OEMs).

Passenger vehicle sales

According to FADA, improved vehicle supply, bolstered by expanded customer schemes, has maintained positive market dynamics. Despite such advances, supply chain bottlenecks persist, particularly in timely deliveries.

Maruti Suzuki India Ltd topped the list for private vehicles and sold 1.33 lakh units in the month of August, showing an increase of 39.4 per cent. It sold 1.16 lakh units in August 2022.

Hyundai Motor India Ltd was second on the list after selling 47,072 units in August. Tata Motors was close third after selling 39,107 units in August, followed by Mahindra & Mahindra Limited (30,989 units), and Kia Motors (18,269 units).

"The market has responded favourably to the introduction of new hybrid and CNG models; however, a constrained product range in popular segments, such as mid-size SUVs, continues to limit overall potential. It is alarming that inventory levels have exceeded a 60-day supply for the first time, even before the onset of the Navratri-Diwali festivities—a trend that necessitates vigilant monitoring by PV OEMs," Singhania said.

Last week, Maruti Suzuki India said it has achieved a significant milestone with its highest-ever monthly sales volume in August 2023, totaling 1,89,082 units. India's biggest carmaker Maruti Suzuki recorded 1,58,678 units in domestic sales, including various sub-segment models. Total sales of the month include domestic sales of 1,58,678 units, sales to other OEM of 5,790 units and exports of 24,614 units.

Here's the breakup of sales:

Mini Segment (Alto, S-Presso): 12,209 units

Compact Segment (Baleno, Celerio, Dzire, Ignis, Swift, Tour S, WagonR): 72,451 units

Total Mini + Compact Segment: 84,660 units

Mid-Size (Ciaz): 849 units

Total Passenger Cars (A Segment): 85,509 units

Utility Vehicles (Brezza, Ertiga, Fronx, Grand Vitara, Invicto, Jimny, S-Cross, XL6): 58,746 units

Vans (Eeco): 11,859 units

Total Domestic Passenger Vehicle Sales (PV): 156,114 units

Light Commercial Vehicles (LCV) - Super Carry: 2,564 units

Total Domestic Sales including LCV (PV+LCV): 158,678 units

Sales to Other OEM: Maruti Suzuki also supplied 5,790 units to other Original Equipment Manufacturers (OEM).

Total Domestic Sales (PV+LCV+OEM): 164,468 units

Export Sales: The company exported 24,614 units of vehicles in August 2023.

Total Sales (Domestic + Export): The overall sales figure for August 2023 reached an impressive 189,082 units.

On the other hand, Hyundai India registered a total sales of 71,435 units in August 2023. Total sales for the month of August 2023 include domestic sales of 53,830 units and exports of 17,605 units.

Commenting on the August 2023 sales numbers, Tarun Garg, COO, Hyundai India said, “HMIL’s August 2023 sales number (Domestic plus Exports) of 71,435 units is a key indicator of an ever-growing acceptance of our products in both domestic and export markets. The festival season in India has kicked off on a positive note with strong Onam sales in Kerala.

Tata Motors reported a marginal drop in its total global sales at 78,010 units in August. Total domestic sales were also marginally lower at 76,261 units as against 76,479 units in the year-ago month, Tata Motors said in a regulatory filing.

Sales of passenger vehicles, including EVs, in the domestic market were down 3.5 per cent at 45,513 units in August 2023 as against 47,166 units in August 2022, it added. Passenger electric vehicle sales, including in international markets, grew by 54.9 per cent at 6,236 units. Total commercial vehicle sales were at 32,077 units from 31,492 units in the same month last year.

Commerical vehicles

The CV sector revealed a multi-faceted scenario: despite headwinds such as sluggish cargo movement, verticals like cement, iron ore, and coal exhibited robust demand.

FADA said as the festive season approaches, indicators suggest a market recovery, reinforced by priority supply scheduling and a resurgence in travel-related sales. Aggressive promotional initiatives and enhanced customer sentiment further support this optimistic outlook.

FADA's September outlook

FADA said the outlook for September remains 'cautiously optimistic', shaped by a multitude of factors that vary across vehicle segments.

In the two-wheeler market, while a broader range of models is now available, subdued rural demand due to insufficient rainfall could temper sales growth.

For CVs, although bulk deals and the favourable timing of the construction season in September add to the optimism, the real sales momentum is anticipated to pick up during the Navratri and Deepawali festival following the Shraadh period.

The PV market, meanwhile, offers a mixed bag: new product launches and better stock availability are positive signs, but high customer discount expectations and the impact of the Shraadh period may act as small speed breakers.

After a prolonged period of stagnation, rural demand is showing signs of a positive resurgence. However, this recovery remains tenuous, contingent on the performance of the final phase of the monsoon season according to FADA.

"Lack of sufficient rainfall could precipitate a rise in inflation, adversely affecting consumer purchasing power and diminishing demand. This meteorological shortfall would not only jeopardize the yield of the ongoing kharif crops but also cast a shadow on the subsequent sowing season for rabi crops," FADA said, adding that such developments would be particularly inopportune as they would coincide with the peak of India's festive season.

Also read: Tata Motors shares cut gains, Maruti Suzuki stock rises after August sales data. Key details

Also read: Maruti Suzuki achieves highest-ever monthly sales of 1,89,082 units in August 2023