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Auto Industry Clocks Highest Retail Sales In November: FADA
All vehicle categories: two-wheeler, three-wheeler, passenger vehicles, Trac and commercial vehicles saw a growth of 24 per cent, 80 per cent, 21 per cent, 57 per cent and 33 per cent respectively in November
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Indian automobile industry recorded highest sales in its history in the month of November 2022, witnessing an year-on-year growth of 26 per cent, the Federation of Automobile Dealers Associations (FADA) said on Thursday.
All vehicle categories: two-wheeler, three-wheeler, passenger vehicles, Trac and commercial vehicles saw a growth of 24 per cent, 80 per cent, 21 per cent, 57 per cent and 33 per cent respectively in November.
The month of March 2020, however, was an exception when retail sales were higher due to BS4 and BS5 transition, FADA said.
According to FADA, the highest retail sales are mainly attributed to the festive sales and the Great Indian Wedding Season from November 14 to December 14. RBIs Consumer Confidence Data also suggests that buoyancy among customers is on a recovery path on account of better perceptions on general economic situation, employment, and household income.
Manish Raj Singhania, President of FADA, said, "November 2022 has clocked highest retails in the history of the Indian automobile industry with March 2020 as an exception when retails were higher due to BS-4 to BS-6 transition.”
When compared with November 2019, a pre-covid month, total vehicle retail closed in marginal positive territory with an increase of 1.5 per cent. However, two-wheeler segment saw a dip of -0.9 per cent. Other categories were in green, with three-wheeler, passenger vehicle, Trac and commercial vehicle growing by 4 per cent, 5 per cent, 61 per cent and 6 per cent respectively.
“The two-wheeler segment showed a huge growth of 24 per cent year-on-year but fell marginally by 0.9 per cent, when compared to November 19. The three-wheeler segments saw a massive growth of 80 per cent year-on-year and four per cent when compared to 2019,” Singhania added.
The passenger vehicle segment saw a growth of 21 per cent year-on-year and 5 per cent when compared to 2019, while the commercial vehicle segment witnessed a growth of 33 per cent year-on-year and 6 per cent compared to 2019.
FADA said with government’s continued focus in the infrastructure space and new mining projects, replacement demand continued to pour in along with healthy inter-state passenger movement enabling bus sales.
Near Term Outlook
Original equipment manufacturers (OEMs) have started announcing discounts for slow moving products, lower variants and to clear their year-end stocks. This may help year-end sales to remain healthy. However, going forward, most of the original equipment manufacturers (OEMs) are likely to increase prices, FADA noted.
“RBI on Thursday increased the repo-rate by 35 bps (225 bps increase since May’22). The latest move by RBI brings repo rate to 6.25 per cent, the highest since February 2019. This will further lead to a higher cost of borrowing apart from the price hikes done by OEMs and may dent the consumer confidence specially in two-wheeler and entry level passenger vehicle segment,” said Singhania.
“The China lockdown may also play its part in slowing the supply of semi-conductors. If this happens, it may act as a speed-breaker and add to supply-demand mis-match which was improving since last few months,” he added.