Poor rural market sentiment, high cost of ownership and inflationary pressures kept two-wheeler sales under pressure: federation president Gulati
Poor rural market sentiment, high cost of ownership and inflationary pressures kept two-wheeler sales under pressure: federation president Gulati
Retail sales of passenger vehicles (PVs) in the country continued to see strong demand in June, with sales of commercial vehicles also seeing growth for the first time since the start of the pandemic, according to auto dealers’ association FADA.
However, two-wheeler sales continued to remain under pressure due to poor market sentiment, high cost of ownership and inflationary pressures.
As per data released by the Federation of Automobile Dealers Associations (FADA), passenger vehicle registrations rose 40.2% to 2,60,683 units in June, compared with a year earlier. The figures reflect a 27% increase over sales seen in June 2019.
Two-wheeler sales grew 20.2% to 11,19,096 units. Compared with June 2019 sales, the metrics show a 16.4% decline.
“The PV segment continued to see robust growth,” FADA President Vinkesh Gulati said in a statement. “An increase in wholesales shows that semiconductor availability is now [easing]. Waiting period, especially in the compact SUV and SUV segments, continued to remain high. New vehicle launches are seeing robust booking thus reflecting a healthy demand pipeline,” he added.
He said the poor market sentiment, especially in rural India, high cost of ownership, inflationary pressures and June generally being a lean month due to the rains kept two-wheeler sales under pressure.
“The commercial vehicle segment showed strength for the first time as it grew by 4% when compared to June 2019, a pre-COVID month. The bus segment, along with LCVs, is showing good traction,” he added.
Commercial vehicle retail sales witnessed an 89% year-on-year increase to 67,696 units. The numbers reflect a rise of 3.93% compared to June 2019 sales of 65,136 units.
Overall retail sales increased 27% to 15,50,855 units compared with a year earlier. However, when compared with June 2019, overall sales last month declined almost 9% from 16,98,324 units.
On the near-term outlook, Mr. Gulati said that during the recent Monetary Policy meeting the RBI Governor had also flagged high inflation as a major cause of concern, adding that in the past few months, prices of almost all essential items had moved northwards, thereby putting pressure on the common man’s household budget and thus reducing his disposable income.
“Additionally, the high fuel prices have had a spillover effect on transportation and made it expensive. This will have a negative effect on entry-level PV as well as the 2W segment which are generally dominated by first-time buyers. On the other hand, ease in availability of semiconductors will see increased supply especially in the PV segment and thus reduce waiting periods. If rural India stabilises, auto retail will enter the festive season on a good note,” he noted.
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