Automobile retail sales in India witnessed a double-digit year-on-year growth in February driven by robust sales across segments including passenger vehicles and two-wheelers, automobile dealers' body FADA said on Monday.

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Total registrations across segments rose 16 per cent year-on-year to 17,75,424 units last month, as compared to 15,31,196 vehicles in February 2022.

Passenger vehicle retail sales rose 11 per cent to 2,87,182 units last month, against 2,58,736 units in the year-ago period.

"Launch of new models, continuously improving supply, coupled with healthy booking-to-cancellation ratio and wedding bells kept the momentum going for the segment," Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said in a statement.

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Two-wheeler registrations rose 15 per cent last month to 12,67,233 units, from 11,04,309 units in February 2022.

"The two-wheeler category witnessed a growth of 15 per cent year-on-year but was down 14 per cent when compared to the pre-Covid month of February'20," Singhania said.

The change in OBD norms which comes into effect from April along with marriage season kept the sales ticking, he added.

"Overall, high inflation and poor sentiment has kept customers at bay," he noted.

Total commercial vehicle retail sales in February grew 17 per cent to 79,027 units, as compared to 67,391 units in the same month last year.

It, however, remained 10 per cent down when compared to pre-Covid month of February 2020.

Three-wheeler retail sales witnessed a massive 81 per cent jump in registrations at 72,994 units, when compared with 40,224 units in February 2022.

Similarly, tractor sales rose 14 per cent year-on-year to 68,988 units in February.

On the business outlook, Singhania noted that multiple festivals in the near-term are expected to push sales.

"On the flipside, India's chief economic advisor said that urban demand recovery is taking place at a faster pace than rural. This along with sharp slowdown in private consumption expenditure to a two-year low suggests a softening in household spending demand amid inflationary pressure as post Covid pent-up demand starts to fade," he added.

Besides, return of El Nino conditions in the Pacific could presage a weaker monsoon in India, resulting in lower output and higher prices impacting auto sales, Singhania said.

"While the month of March looks good, on a medium-term outlook, FADA remains cautious till the time a better monsoon forecast is not announced by IMD," he noted.

FADA said it collated vehicle retail data from 1,348 out of 1,434 RTOs across the country.

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