Auto sales May: Auto sales treble on year in May, but on a low base

Retail sales of cars tripled year over year last month, in line with wholesale deliveries, albeit on a low basis, as operations were disrupted in May 2021 due to the outbreak of the second wave of the pandemic.

According to data available from the Federation of Automobile Dealers Association (FADA), 1,646,773 vehicles were sold at retail, compared to 536,795 units in May last year. However, sales were down about 10% compared to the pre-Covid month of May 2019.

Automakers in India report wholesale shipments from factories and not retail sales to customers. Registration numbers are therefore used as a proxy for retail sales.

The number of registrations in various categories was much higher last month than in May 2020 and May 2021, when sales were low due to the first and second wave of the pandemic, said FADA president Vinkesh Gulati.

“India’s auto industry continued its flat course for the third consecutive month in May 2022,” he said. “While the year-over-year comparison with May 2021 shows an exceptionally healthy growth rate across all categories, it is important to note that both May 2021 and May 2020 were affected by the nationwide lockdown as a result of Covid. Therefore, a better compared to May 2019, which was a normal pre-Covid month.”

Retail sales of passenger cars and tractors increased by 11.40% (to 263,152 units) and 33.09% (to 52,487 units) respectively, compared to May 2019. However, registrations of two-wheelers, three-wheelers and commercial vehicles decreased by -13, respectively. 91% (to 12,22,994 units), -19.32% (to 41,508 units) and -11.44% (to 66,632 units), versus May 2019.

Gulati said the government’s decision to cut excise taxes on fuel will help tame inflation and boost sales of vehicles, especially two-wheelers. But the increase in third-party insurance premiums is likely to dampen motorcycle and scooter buyers coming forward and finalizing their purchase decision.

“The two-wheeler segment has seen a slight improvement in overall sales compared to April ’22,” he said. “While two-wheeler EV sales grew rapidly, albeit on a low base, several fire incidents across nearly all EV brands have caused customer fears, coupled with supply chain issues, have drastically reduced two-wheeler EV sales from previous levels. month.”

The data was compiled by FADA from the Vahan platform of the Ministry of Road Transport and Highways (MoRTH). Vahan collects data from 1,481 of the country’s 1,616 regional transportation offices (RTOs).

With Andhra Pradesh’s transport ministry migrating to the Vahan platform, the data now reflects registrations of 91.6% RTOs in India, FADA said. While demand in the passenger car segment remained strong, the global auto industry continues to witness supply disruptions, especially in semiconductors, amid the Russia-Ukraine conflict and Covid-induced lockdowns in China, Gulati said. .

The Reserve Bank of India has warned of increased inflation as the rise in wholesale prices will be passed on to consumers, decreasing his/her disposable income. The wholesale price index (WPI) rose by a record 15.1% in April at high commodity prices.

Customers in the passenger car segment will continue to witness long wait times due to delivery issues, Gulati said.

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