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Auto sector rebounds! PV retail sales jump 43% over strong pent-up demand in June

Auto sector rebounds! PV retail sales jump 43% over strong pent-up demand in June

FADA says PV category maintained good demand as customers continued to show keenness in vehicles considering safety of their families. Two-wheeler category, though in green, saw softer recovery as rural market took time to get back from post-covid stress

FADA said it's a wait and watch game before the overall economy shapes up over the next couple of months FADA said it's a wait and watch game before the overall economy shapes up over the next couple of months

Auto sales across categories were in the green in June with the ebbing of the second Covid-19 wave. Passenger vehicles category sold a total 1,84,134 units in June compared to 1,28,360 units sold in the same period last year, showing a 43 per cent rise in retail sales, the latest data from Federation of Automobile Dealers Associations of India shows.

As per the industry body, the passenger vehicles category maintained good demand as customers continued to show 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 took time to get back from post-covid stress. The commercial vehicle segment recorded a staggering growth in June on YoY basis, though on a very low base as there were product shortages due to the BS-6 transition last year.

Overall, the total vehicle sales for June rose 22.62 per cent YoY, primarily on a low base. Retails are still down by -28.32 per cent when compared to June 2019 (a regular pre-covid month).

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On a YoY basis, all others categories were in green, with two-wheeler retail sales up 17 per cent; 3-wheeler sales up 22 per cent; tractor sales up 14 per cent and commercial vehicle retail sales rising a massive 236 per cent.

The positive momentum from June carried forward in July. "With southern India opening up, we can expect a further pickup in demand. While daily infection cases have been contained offering some respite from the debilitating second wave, the new virus mutants and the impending 3rd wave continue to pose as risks on a longer-term," FADA stated.

The association said the Centre's move to bring the entire auto retail under MSME will help it at a time when gears are down. "The month of 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 statewide lockdowns," FADA President Vinkesh Gulati said.

In its near-term outlook, FADA has said the auto industry is yet to see retail numbers comparable to FY19, and the opening up of southern India could help pick up demand. FADA said the continued global semiconductor shortage is impacting demand-supply mismatch, which has restricted passenger vehicles sales growth.

"While the new virus mutants and a prediction of 3rd wave in August are affecting sentiments, the revival of monsoons in July after a pause of 2 weeks and a better vaccination drive rate continues to build some hope," it said.

FADA said it's a wait and watch game before the overall economy shapes up over the next couple of months. It said demand may be a "mixed bag" in the coming months and recovery may be back on track by the time of Navratri and Diwali.

Also read: Retail auto sales in May plummet 70%; June starts on promising note