Domestic automobile retail sales rise 10% in June: FADA

Domestic automobile retail sales rose 10 per cent in June driven by sales growth across various segments, including passenger vehicles and two-wheelers, automobile dealers body FADA said on Thursday.

Total retail sales last month rose to 18,63,868 units from 17,01,105 units in the year-ago period.

Passenger vehicle retail sales increased 5 per cent to 2,95,299 units as against 2,81,811 units in June 2022.

Similarly, two-wheeler sales climbed 7 per cent to 13,10,186 units last month as compared with 12,27,149 units in the same month last year.

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Three-wheeler sales surged 75 per cent to 86,511 units from 49,299 units in June last year.

Tractor retail sales jumped 45 per cent year-on-year to 98,660 units while there was a marginal rise in sales of commercial vehicles at 73,212 units from 72,894 units in June 2022.

FADA President Manish Raj Singhania said while there is a 10 per cent year-on-year growth, the auto retail sector has seen an 8 per cent month-on-month dip, indicating a short-term deceleration in sales.

"Despite some short-term contraction, India's growth narrative remains resilient. The month of June registered all-time highs for three-wheeler, passenger vehicle and tractor segments when compared to all the previous June months," he added.

Singhania said the PV segment navigated through a mixed landscape characterised by variable demand, dynamic product portfolios and oscillating market sentiments.

Commenting on the two-wheeler sales, he noted that the sector wrestled with supply constraints from certain OEMs (Original Equipment Manufacturers) and a softer demand attributed to economic conditions and higher entry-level bike costs.

New model introductions, festive promotions and seasonal factors could not markedly boost sales, Singhania said.

"A 12 per cent month-on-month drop was observed in two-wheeler sales, with electric vehicle sales witnessing a 56 per cent month-on-month decline, primarily due to the government reducing FAME subsidies," he added.

The CV segment confronted mixed dynamics influenced by inconsistent demand, supply issues, government policies and external market factors, he noted.

On the near-term business outlook, Singhania said the delayed and uneven rains may reduce crop yields, shorten crop cycles and cause a delay in future crop arrivals.

Such developments may affect the sales of automobiles, particularly in rural areas where a weak agricultural season could lead to a reduction in disposable income, thus affecting demand for two-wheelers and entry-level cars, he said.

"Yet, upcoming rains may potentially boost agricultural prospects, revive rural demand, and positively influence automotive sales. FADA hence remains cautiously optimistic for the near-term outlook," he added.

The Federation of Automobile Dealers Associations (FADA) said it collated the vehicle retail data from 1,351 out of 1,437 RTOs across the country.