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Auto sales surge in September amid easing supply woes

Vehicle registrations, a proxy for retail automotive sales in India, rose last month amid easing supply constraints and robust car purchases ahead of the festive season. Data available with the Federation of Automobile Dealers Associations of India (FADA) showed 1,464,001 vehicles were retailed in September, which is an increase of 10.94% compared with 1,319,647 units sold in the same period last year. Sales were, however, 3.80% lower when compared with pre-Covid September in 2019, when 1,521,893 vehicles were registered in the country.

FADA president Manish Raj Singhania said: “Auto retail for the month of September 2022 saw an overall growth of 11%. September witnessed both the inauspicious period of Shradh (a.k.a Pitru Paksha) from September 10-25 and festive period which began with Navratri on September 26. Due to this, the full potential for the month was not realised as it should have been.”

The federation has compiled the numbers from the vehicle registration data available on the road transport and highways ministry’s Vahan dashboard. Although the numbers are incomplete as some regional transport offices are still not linked to the Vahan portal, these are seen as a good proxy for the trend in the automobile retail market as manufacturers only disclose their dispatches from factories.

Retail sales of three-wheelers and CVs rose by 72% (to 63,915 units) and 18.87% (to 71,233 units), respectively. Retail sales of commercial vehicles remained strong last month with government spend on infrastructure helping customers in concluding their purchase. “The HCV segment showed a healthy growth of 40% YoY. Reasons like better availability of vehicles, festivities, bulk fleet purchase and government’s continued push for infrastructure development made this segment shine,” Singhania said.

In the three-wheeler segment, demand was driven by e-rickshaws due to increased movement of passengers. Sales for two-wheelers expanded 9% to 1,015,702 units in September, but fell 14% from September 2019. Singhania explained that due to increased input costs, two-wheeler companies raised prices five times in the past one year. Additionally, the RBI raised rates to contain inflation, making financing expensive. “While India is showing revival signs, Bharat is yet to perform. Two-wheelers, especially entry-level vehicles, are finding few buyers, thus dragging the entire segment,” he said. Average inventory of two-wheelers now stands at 45-50 days.

In the passenger vehicle segment, demand remained robust with registrations going up by 10% over last September; and by 44% when compared to September 2019, a pre-Covid month. Better availability due to easing semiconductor supply, new launches and feature rich products drew customers to dealerships for their favourite vehicles during the auspicious period.

“The waiting period continues to range between 3 months and 24 months, especially for SUVs and compact SUVs that have become the absolute choice for today’s customers,” said Singhania. Inventory of PVs stands at 40-45 days.

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