Automobile retail sales in slow lane in May: FADA

The automobile dealers' body FADA said on Monday that retail sales of passenger vehicles grew last month but the sales of two-wheeler and commercial vehicles remained low compared to the pre-COVID month of May 2019, as per PTI reported.

FADA reported that overall car retail sales in May were 16,46,773 units, down from 18,22,900 units in May 2019.

According to PTI, "May 2022 retails when compared to May 2019 reveal that sales are still not on a growth trajectory as overall retails were down by 10 per cent. While PV and tractors continued its positive run... Two-wheeler, three-wheeler and CV sales are yet to show any signs of healthy run-rate," Federation of Automobile Dealers Associations (FADA) President Vinkesh Gulati said in a statement.

While a year-over-year (Y-o-Y) comparison with May 2021 reveals an extraordinarily high growth rate across all categories, he noted that both May 2021 and May 2020 were afflicted by statewide lockdown due to the COVID pandemic.

A better comparison, according to him, will be with May 2019, which was a normal pre-COVID month, said PTI.

Passenger Vehicle (PV) retail sales were 2,63,152 units last month. This was up 11% from the 2,36,215 units sold in May 2019.

The retails in the COVID-affected months of May 2021 and May 2020 were 86,479 and 31,951 units, respectively, PTI said.

"The PV segment which has already surpassed May 2019 numbers is witnessing huge demand. Dealers are not able to fulfil the same due to supply-side issues," he said, adding that this has led to an increase in waiting period ranging from three months to two years.

According to PTI, "Healthy booking and single-digit cancellation show that demand may stay put even when normal supply resumes in months to come," Gulati noted.

Two-wheeler sales totaled 12,22,994 units last month. In May of last year, it stood at 4,10,871 units.

In May 2019, the two-wheeler retails stood at 14,20,563 units, said PTI.

"The two-wheeler segment has seen a slight improvement in overall sales when compared with April this year," Gulati said.

While electric two-wheeler sales were fast increasing, he added that fire incidences across practically all brands had instilled anxiety in the minds of customers, PTI said.

"This coupled with supply chain issues has decreased two-wheeler EV sales drastically from last month," Gulati said.

Last month, commercial vehicle sales totaled 66,632 units, up from 17,607 units in May of the previous year. However, compared to 75,238 units in May 2019, it remained low.

Similarly, three-wheeler sales were down last month, with 41,508 units sold compared to 51,446 in May 2019. Retail sales were 5,215 units in May of last year, said PTI.

Tractor sales, on the other hand, increased this month to 52,487 units, up from 39,438 units in May 2019.

On the sales outlook, Gulati said while the Russia-Ukraine war continues to create a demand-supply mismatch thus delaying the availability of PVs, RBI has warned of more inflation as the increase in wholesale prices will get passed on to the end consumers. "This will result in a lower disposable income which will ultimately hamper auto sales."

As a result, he observed, FADA remains cautious about any further recovery in auto sales in the short term, said PTI.