Retail vehicle sales in Aug rose 14%, CV sales up 98%

New Delhi, Sep 7 Dealers registered a 14.48 per cent rise in total retail sales of vehicles in August 2021, compared to the same month last year.

Total retail vehicle sales for last month stood at 13,84,711, against 12,09,550 in August 2020, according to the data released by the Federation of Automobile Dealers Associations (FADA) on Tuesday.

The data, however, showed that sales were lower by 14.75 per cent when compared to August 2019, a pre-covid month.

All categories witnessed a rise in their sales. Two-wheeler sales rose by 6.66 per cent, while three-wheeler sales were up 79.70 per cent.

Personal vehicle sales rose 38.71 per cent. Commercial vehicles sales witnessed a robust growth of 97.94 per cent and tractor sales rose 5.50 per cent during the month under review.

FADA President, Vinkesh Gulati said: "Auto dealers are facing the most challenging phase of their business career as Covid-19 after-effect continues to play spoil-sport. While until last year, when demand was a challenge, supply is becoming a bigger problem currently due to shortage of semi-conductors, even though there is high demand for passenger vehicles."

He added that every dealer by now starts planning for a bigger offtake in anticipation of a bumper festive but due to supply issues, inventory levels are at lowest levels during this financial year.

Noting that the two-wheeler market is highly price sensitive, Gulati said that with multiple price hikes, increased fuel cost coupled with educational institutions remaining closed, the impact could be felt on the overall segment.

"Customers continued to fight financial battle due to Covid related health issues and hence remained away from dealerships resulting in low enquiry and lower sales. This has its impact on the entry level segment which continues to face the biggest brunt," said the FADA Chairman.

He was of the view that the commercial vehicle segment continues to witness some recovery coming back majorly due to low base of last year.

"While SCV's had already shown good recovery due to intra city goods movement, M&HCVs are picking up pace only in specific geographies where the government is rolling out infrastructure projects," he said.

Gulati, however, added that acquisition cost post BS-6 implementation along with financers keeping away from the segment and high fuel cost continues to restrict recovery in CV demand.

FADA, in its statement on Tuesday noted that with OEMs (original equipment manufacturers) drastically cutting down productions due to unavailability of semi-conductors and ABS chips, shortage of containers and high metal prices, customers for the first time may not get a vehicle of their choice and lucrative schemes during this festive season.

Further, ultra-frequent price increase is also keeping entry level buyers at bay.

Customers especially at the bottom of the pyramid are shifting their priority from saving instead of spending, it said, adding that this will hence keep demand for two-wheelers a concern.

"Though, with educational institutions slowly opening up, a ray of hope can be seen for an improved demand in 2-wheeler category in coming months," it said.

FADA anticipates that the near-term outlook will continue to remain a mixed bag with personal vehicles witnessing demand-supply mismatch and two-wheelers facing a demand crunch.