Retail sales of automobiles in India grew 37% last month to 16,27,975 units, helped by the low base from a year earlier because of the lockdowns during second wave of COVID-19, according to the Federation of Automobile Dealers Associations (FADA).
Noting that retail sales were yet to recover from the “jitters of COVID”, the Federation added that the RBI’s move to increase the benchmark interest rate by 40 bps had taken everyone off guard and would dampen sentiment further as auto loans would become expensive. However, the federation has changed its stance from ‘extremely cautious’ to ‘cautious’ in terms of anticipation of slight recovery in the near term.
While FADA added that Russia-Ukraine war and the lockdown in China would also continue to create a demand-supply mismatch, it said private consumption was regaining traction backed by a recuperating contact-intensive services industry and rising discretionary spending, ahead of the upcoming marriage season. Additionally, the monsoon is forecast to be normal, and if evenly distributed, it would have a ‘positive effect’ on rural sentiment, benefitting tractor and two-wheeler sales.
As per data from FADA, passenger-vehicle registrations rose 25% to 2,64,342 units last month compared with a year earlier. Two-wheeler sales grew 38% to 11,94,520 units, while commercial vehicles climbed soared 52% to 78,398 units. Sales of three-wheelers were 96% higher and tractor registrations increased 26%.
“While Y-o-Y comparison with April 2021 shows all categories in green with high growth rate, it is important to note that both April 2021 and April 2020 were affected by nationwide lockdown due to phase one and two of the COVID wave, which witnessed no-to-negligible business,” FADA president Vinkesh Gulati said, adding that a better comparison would be with April 2019.
“April 2022, when compared with April 2019, reveals that we are still not out of the woods as overall retails were down by 6%,” he stated.