The Federation of Automobile Dealers Associations (FADA) released Vehicle Retail Data for May 2022 today. On YoY basis, total vehicle retail sales for the month of May 2022 increased by 207%. All categories were in green. The 2W, 3W, PV, Tractors and CV were up by 198%, 696%, 204%, 216% and 278% respectively.
Auto Retail trade has still not recovered from the jitters of Covid. When compared with May'19, total vehicle retail was down by -10%. Except PV and Tractor which continues to show growth of 11% and 33%, all the other categories like 2W, 3W and CV fell by -14%, -19% and -11% respectively.
Government's reduction in fuel prices will tame inflation and boost vehicle sales, especially 2W but the increase in 3rd party insurance premiums will act as a deterrent for the 2W customers to come forward and conclude their purchase decision. While the Russia - Ukraine war continues to fuel chip shortage, RBI has warned of more inflation as the increase in wholesale prices will get passed to the consumer thus decreasing disposable income.
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