Automobile Retail Sales Jump 23% In June 2021: FADA

According to data released by the Federation of Automobile Dealers Association (FADA) on Thursday, total vehicle retail sales in June 2021 were 1,217,151 units as against 992,610 units year-on-year

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Owing to a low base recovery, passenger vehicle (PV) registrations saw year-on-year growth of 43.45 per cent to 184,134 units in June 2021, as per the data shared by the Federation of Automobile Dealers Association (FADA) based on VAHAN.

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Total vehicle registrations at regional transport offices (RTOs), which are proxies for sales, rose by 22.62 per cent to 1,217,151 units over June last year. When compared to June 2019 (a regular pre-COVID month), retail sales are still down by 28.32 per cent, according to the report.

"June witnessed re-opening for most of the states except the ones in the South. Due to this, the industry witnessed a high pent-up demand which was stuck in the system because of state-wide lockdowns," said Vinkesh Gulati, president, FADA.

"Passenger vehicles continued to see good demand as customers showed keenness in vehicles for observing social distancing and safety of their families. The two-wheeler category, though in green, witnessed a softer recovery as the rural market is taking time to get back from the post-COVID stress. Commercial vehicle segment saw staggering growth over last year, though on a very low base as there were product shortages due to BS-6 transition," Gulati added.

"Overall, the industry is still not out of the woods. When compared to June 2019, we are still in the red by -28 per cent with 3W and CVs taking the maximum hit as they are down by -70 per cent and -45 per cent respectively. Only tractors continued to grow as it was up 27 per cent compared to June 2019," he shared.

On a year-on-year basis, all the categories were in the green. The increase in retail sales was the lowest for tractors and the two-wheeler segment witnessed a year-on-year growth of 14.27 per cent and 16.90 per cent respectively in June 2021.

Commercial vehicles, on the other hand, reported a sharp increase of 136.19 per cent to 35,700 units this month, up from 10,619 units in the same month last year.

On the outlook for the next month, FADA said that the positive momentum in June continues to July. With southern India opening up, we can expect a further pickup in demand. In the longer term, the auto industry is yet to see retail numbers comparable to FY20.

"Continued global semiconductor shortage is creating demand-supply mismatch thus restricting the growth of passenger vehicles. While the new virus mutants and a prediction of a third wave in August are affecting sentiments, the revival of monsoons in July after a pause of two weeks and a better vaccination drive rate continues to build some hope," FADA commented.

"We will therefore have to wait and watch how the overall economy shapes up over the next couple of months. We hence see the demand to be a mixed bag and hope that recovery is back on track by the time Navratri and Diwali knock at our door," FADA further added.