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After two good months, retail auto sales decline 5% in December: FADA

The two-wheeler segment registered a de-growth of 11 per cent YoY in December 2022. All the other categories were in the green

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Raghav AggarwalShine Jacob New Delhi
3 min read Last Updated : Jan 05 2023 | 11:34 AM IST
After two months of the festive season's positive impact in October and November, retail automobile sales in India saw a 5 per cent dip in December 2022, mainly due to a decline in two-wheeler (2W) sales by 11 per cent, said data shared by the Federation of Automobile Dealers Associations (FADA).

In November, vehicle sales had jumped 26 per cent, pushed by the wedding season and in October, the sector had registered a 48 per cent rise in sales mainly due to the festive season.  

Apart from the 2W segment, all the other categories were in the green, with three-wheeler (3W), private vehicles (PV), tractor and commercial vehicles (CV) growing by 42 per cent, 8 per cent, 5 per cent and 11 per cent, respectively.

"Due to reasons like rise in inflation, increased cost of ownership in the rural market yet to pick up fully and increased EV sales, the ICE two wheeler segment is yet to see any green shoots," said FADA President Manish Raj Singhania.

The sales, however, were still not at pre-pandemic levels. Compared to December 2019, total retail auto sales were down 12 per cent. Here also, except 2W, which fell by 21 per cent, all the other categories like 3W, PV, Tractor, and CV closed in green by 4 per cent, 21 per cent, 27 per cent and 9 per cent, respectively.

"The 2W segment once again failed to impress as retail sales during December 2022 continued to fall after 2 good months. Reasons like rise in inflation, increased cost of ownership, rural market yet to pick up fully and increased EV sales, the ICE 2W segment is yet to see any green shoots," Singhania said.

For the calendar year 2022 (CY22), while total vehicle retails grew by 15 per cent year-on-year and 17 per cent compared to CY20, it failed to surpass CY19 (a pre-covid year) and registered a fall of 10 per cent. However, PVs reported the highest sales ever in 2022 at 3.43 million units.

The three-wheeler segment, which was completely down during the Covid-19 pandemic, has recovered well and narrowed its gap compared to CY2019. Within the segment, the electric rickshaw sub-segment is showing triple-digit growth, thus pushing the EV market share above the 50 per cent mark.

"The PV segment has continued to show remarkable consistency in growth during the entire year. While supply woes have decreased, better product spread and high consumer offers have kept consumer interest on. The commercial vehicle segment has continued to grow during the entire CY22 and is now almost at par with CY19 retails," Singhania added. This is due to an uptick in demand for LCV, HCV, buses and construction equipment.

Apart from PV, the tractor segment was the only other segment that registered sales higher than in 2021, 2020 and 2019. It also registered a new lifetime high of 794,000 units.

"This was possible due to consistently good monsoon, improved cash flow with farmers, better MSP of crops and the government's focus on better procurements. Apart from this, timely sowing of rabi crops also helped to continue this momentum. Festive season sales which were normal after three years also played its part in this strong momentum," he added.

The automobile association said that due to inflation pressure and the upcoming change in vehicle norms resulting in price hikes, it remains cautious during the last quarter of FY23.

"Due to inflation pressure, upcoming change in vehicle norms resulting in price hikes, FADA remains cautious during the last quarter of FY23," it said.

Topics :Auto salestwo wheeler salescommercial vehicleBS Web ReportsAutomobile

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