Barring PVs, tractors, retail sales remain subdued in May 2022, says FADA

Domestic sales of automobiles, barring passenger vehicles (PVs) and tractors, in India continue to remain subdued in May 2022 if one were to compare it with the retail figures of the year 2019, as both 2020 and 2021 were partially affected by the pandemic. 

May’22 retail figures when compared to May’19 reveal that auto retail is still not on growth trajectory as overall retails were down by -10%. This was revealed by the data provided by the Federation of Automobile Dealers Associations (FADA).

While PV and tractors continued its positive run by growing 11% and 33%, 2W, 3W and CV are yet to show any signs of healthy run-rate (compared to pre-covid months) as they de-grew by -14%, -19% and 11% respectively.

FADA has also informed that with its persistent follow up with the Andhra Pradesh Transport Ministry, the state has now migrated vehicle registration to Vahan. While this has happened towards the end of May, full month numbers will only come later. The only states remaining are Telangana, Madhya Pradesh and Lakshadweep. With this Vahan now covers 91.6% RTOs across the country.

Commenting on how May’22 performed, FADA President Vinkesh Gulati said, “Indian Auto Industry during May’22 continued its flattish run for the 3rd consecutive month. While YoY comparison with May’21 shows exceptionally healthy growth rate across all categories, it is important to note that both May’21 and May’20 were affected by nation-wide lockdown due to covid thus witnessing. Hence a better comparison will be with May’19 which was a normal pre-covid month.”

The Government made a bold decision to cut excise duty on fuel prices thus reducing inflation and economic distress. While this will have a positive rub-off on sale of vehicles especially 2W, the increase in 3rd party insurance premium will act as a deterrent for some, Gulati informed.

The 2W segment has seen slight improvement in overall sales when compared with April’22. While 2W EV sales were growing rapidly though on low base, various fire incidents across almost all EV brands has created a fear in the mind of the customer. This coupled with supply chain issues, has decreased 2W EV sales drastically from last month.

The PV segment which has already surpassed May’19 numbers is witnessing huge demand. Dealers are not been able to fulfil the same due to supply side issues. This has not only led to an increase in waiting period (ranging from 3 months to 2 years) but is also keeping the customers frustrated. Healthy booking and single digit cancellation shows that demand may stay put even when normal supply resumes in months to come, FADA noted.

All India Vehicle Retail Data for May’22

Source: FADA Research

Disclaimer:

The above numbers do not have figures from AP, MP, LD & TS as they are not yet on Vahan 4. However, for May’ 2022 Numbers Andhra Pradesh Data has been covered.

Vehicle Retail Data has been collated as on 04.06.22 in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,481 out of 1,616 RTOs.

CV is subdivided in the following manner

LCV – Light Commercial Vehicle (incl. Passenger & Goods Vehicle)

MCV – Medium Commercial Vehicle (incl. Passenger & Goods Vehicle)

HCV – Heavy Commercial Vehicle (incl. Passenger & Goods Vehicle)

Others – Construction Equipment Vehicles and others