October 2022 will be BEST year for car sales in this decade: Report

The Federation of Automobile Dealers Associations (FADA) total retail sales of automobiles rose 11 percent year over year in September 2022, according to a report. According to the FADA report, Vehicle Retail Data for September 2022, October will be a banner month for the automotive industry, with 24 out of a total of 31 days of the month devoted to celebrations. According to the survey, dealers predicted that this holiday season would be the best for the passenger car market in a decade, as they expect even more sales during the month.

The report said all other categories were green, except tractors, which decreased by 1.5 percent. Sales of two-wheelers (2W), three-wheelers (3W), passenger cars (PV) and commercial vehicles (CV) increased by 9 percent, 72 percent, 10 percent and 19 percent respectively.

Compared to September 2019, a pre-Covid month, total car sales remained 4 percent lower. The PV segment maintained its healthy run with 44 percent growth. Similarly, growth in 3W, tractor and CV also closed in the green with an increase of 6 percent, 37 percent and 17 percent, respectively. It’s only the 2W segment that remains a drag as the same fell 14 percent. Rural India in states like Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh and Jharkhand showed weakness with a lower contribution to auto retail, especially in the entry-level category – 2W and PV, the report said. While total PV retail sales will be ten-year highs during this holiday season, it’s the 2W category where the auto industry continues to place hopes for healthy growth.

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FADA President Manish Raj Singhania said: “Automotive retail for the month of September 2022 had an overall growth of 11 percent. September witnessed both the unfavorable period of Sradh from September 10-25 and the festive period, which started with Navratri on September 26 As a result, the full potential for the month was not realized as it should have been.” The 2W segment grew 9 percent yoy, but declined 14 percent as of September 2019.

Due to increased input costs, 2W companies have increased prices 5 times in the past year. Beyond this, the Reserve Bank of India’s (RBI) battle with inflation fueled interest rate hikes, keeping auto loans expensive. The report said that while India showed signs of upturn, Bharat has yet to perform, and 2W, especially the entry-level models, are finding extremely fewer buyers, dragging the entire segment.

The FADA report said the 3W segment continued to see a structural shift from combustion engine (ICE) to electric vehicle (EV). This is also reflected in an extremely healthy growth of e-rickshaws. In addition to better availability of vehicles with a full range of products, including alternative fuels, customers have turned to public transport and the rickshaw service, fueling demand in this segment.

While the CV segment grew 19 percent, it was the heavy-duty vehicle (HCV) segment that showed healthy growth of 40 percent yoy, the FADA report said. Reasons such as increased vehicle availability, festivities, bulk fleet purchases and continued government pressure on infrastructure development made this segment shine.

The report also added that the PV segment continued its Bolt` run growing 10 percent yoy and 44 percent compared to September 2019, a pre-Covid month. The report said: “Better availability thanks to the easing of semiconductor supply, new launches and feature-rich products kept customers hooked to dealers for getting their preferred vehicles during the favorable period. Waiting time continues to vary between three months and 24 months , especially for SUVs and compact SUVs, which have become the absolute choice for today’s customers.”

(With input from ANI)

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