PV Sales Dip 10.12 Pc In Jan 22: FADA

Mumbai, Feb 7: Passenger vehicles retail sales witnessed a 10.12 per cent decline in January 2022 as compared to the corresponding month last year, largely impacted by the shortage of semiconductors, a recent report said. According to the data collected by the Federation of Automobile Dealers Association (FADA) from 1386 RTOs out of the total 1597 RTOs across the country, as many as 2,58,329 passenger vehicles were sold during the month as against 2,87,424 units sold in January 2021.

The passenger vehicle inventory continued to remain at historic low of 8-10 days. “In spite of good demand, passenger vehicles continue to face the brunt of semiconductor shortage resulting in void of a healthy inventory,” FADA President Vinkesh Gulati said. According to the data, the total vehicle retail for the month declined 10.70 per cent to 14,39,747 units from 16,12,130 units in January 2021. “The month of January continues to show weak performance as overall retails on a YoY basis, fell by 10.7 per cent. While 3-wheeler and commercial continues to remain in green with a growth of 30 per cent and 20.5 per cent, 2-wheeler, PV and tractors closed in negative with degrowth of 13 per cent, 10 per cent and 10 per cent, respectively.

Auto retails weak performance of 18.4 per cent compared to January 2020, a pre-covid month, continues to show that India is yet to recover from the Covid effect which gripped the world 2 years ago,” Gulati said, adding that nearly 55 per cent of the dealer surveyed said that they lost over 10 per cent sales due to the Omicron wave. A total of 67,763 commercial vehicles were sold during the month as against 56,227 units in January 2021, registering a growth of 20.5 per cent.

“With the revival in the economy, CV segment continues to show Y-o-Y growth especially in heavy commercial vehicle category. With increased infrastructure spending by the Central as well as the state governments, overall CV segment remains in momentum,” he added. According to the data, tractor sales stood at 55,421 units last month, down 9.86 per cent from 61,485 units in January 2021. The 3-wheeler retail sales grew by 29.8 per cent to 40,449 units in January 2022 as compared to 31,162 units in 2021.

The 2-wheeler sales in January this year declined by 13.44 per cent to 10,17,785 units, compared to 11,75,832 units, a year-ago, “Coming to the 2-wheeler category, the rural distress coupled with price rise and omicron wave played a villain’s role for this segment,” Gulati added. He, however, noted that as India gets back on its feet post the third wave of Covid, the auto retail is expected to slowly turn positive.

“Semi-conductor shortage is also showing some signs of easing as many PV OEMs assure of better dispatch. We hence expect vehicle availability to improve going further,” he said. Stating that the Union Budget’22 stresses on developing 25,000 km of new highways, Gulati said this will further push infrastructure spending, thus resulting in an increase in commercial vehicle sales.

Added to this, some traction is also being witnessed in replacement demand after a period of two years, he said. Noting that rural India has generally been a key driver for 2-wheeler and entry level passenger vehicle segment, he said, “With the government’s plan for 2.3 lakh crore direct payment as MSP to farmers, it may work as a booster for 2-wheeler, tractor and entry level PV sales. The upcoming marriage season will also trigger some demand revival for the 2-wheeler segment,” he said. Overall, FADA has changed its outlook from ‘negative – neutral’ to ‘neutral’ for the next couple of months, Gulati added.