As wedding bells ring, auto sales see overall growth of 26pc: FADA

Auto retail in November’22 saw an overall growth of 26 per cent, according to Nov 2022 sales data released by the Federation of Automobile Dealers Associations (FADA).

According to FADA, sales were aided by the Great Indian Wedding Season (from 14th November to 14th December) where around 32 lakh weddings are being solemnised across the country. All categories were in green with 2W, 3W, PV, Tractor and CV growing by 24%, 80%, 21%, 57% and 33% respectively.

Commenting on how November’22 performed, FADA President Manish Raj Singhania said, “November 2022 has clocked highest retails in the history of Indian Automobile Industry with March’20 as an exception when retails were higher due to BS-4 to BS-6 transition.

Even when compared to pre-covid month of 2019, overall retails for the second consecutive month closed in green by growing 1.5%. Except 2W, which saw a marginal dip of -0.9%,all the other categories like 3W, PV, tractors and CV grew by 4%, 5%, 61% and 6% respectively.

Near Term Outlook

The RBI’s latest Consumer Confidence Data suggests that buoyancy among customers is on a recovery path on account of better perceptions on general economic situation, employment, and household income. This along with the ongoing festive season has continued to help in bringing customers to the showrooms as on date.

Most of the OEMs are announcing price hikes going forward. To counter this and for the lower end of the pyramid, OEMs have started announcing discounts for slow moving products, lower variants and to clear their year-end stocks. This may help year-end sales to remain healthy.

While the above actions are positive, RBI has increased the repo-rate by 35 bps (225 bps increase since May’22) and continues to hint at more hikes in future. This increase now brings repo rate to 6.25%, the highest since Feb’19. This will further lead to a higher cost of borrowing apart from the price hikes done by OEMs and may dent the consumer confidence specially in 2W and entry level PV segment. Along with this, the China lockdown may play its part in slowing the supply of semi-conductors. If this happens, it may act as a speed-breaker and add to supply-demand mis-match which was improving since last few months, FADA noted.

All India Vehicle Retail Data for November’22

Source: FADA Research