FADA Sales August 2023: Auto Sales Up 9 Per Cent; Two-Wheeler Sales Remain Below Pre-Covid Levels

The Federation Of Automobile Dealers Association (FADA) released the industry sales numbers for the month of August 2023 reporting a growth of 8.63 per cent. Total sales across all vehicle categories in the month amounted to 18,18,647 units – up from 16,74,162 units last year. Sales were also up 2.74 per cent over July 2023 (17,70,181 units).

Sales were up year-on-year across all categories. Two-wheeler sales grew 6.29 per cent over August 2022 at 12,54,444 units while passenger vehicle sales were up 6.53 per cent to 3,15,153 units. Three-wheelers meanwhile have continued to perform strongly with 99,907 units sold (up 66.15 per cent year-on-year) in the month – a new monthly high for the segment. The segment had previously reported its highest sales in July 2023 at 94,148 units. Commercial vehicle sales grew by about 3 per cent both month-on-month and year-on-year to 75,849 units while tractor sales declined 18.64 per cent over July 2023 to 73,849. Year-on-year sales in the segment were up 13.58 per cent.

Commenting on Aug 2023 industry sales performance, FADA President, Manish Raj Singhania said, "Auto Retail in August witnessed a promising 9% YoY growth, maintaining momentum similar to the preceding month. Concurrently, a 3% MoM uptick suggests a reversal in short-term trends. On YoY basis, a comprehensive growth was observed across multiple segments, 2W at 6%, 3W at 66%, PV at 6.5%, Trac at 14%, and CV at 3%. During MoM, all segments experienced growth, with the exception of tractors, which saw a 19% decline. When compared against pre-COVID benchmarks, the auto retail sector indicated a modest 0.8% improvement, led by 2Ws recouping lost ground and mitigating the de-growth by 11%.”

Singhania commented that the two-wheeler segment despite its positive growth still showed mixed consumer sentiment which impacted the conversion rates. He also noted that the passenger vehicle segment had responded favourably to the launch of new hybrid and CNG models though, “a constrained product range in popular segments, such as mid-size SUVs, continues to limit overall potential.” He also noted that it was “alarming” that inventory levels had exceeded a 60-day supply for the first time in the segment prior to the festive season.

Coming to the near-term outlook, the apex dealer body said that while rural demand was showing signs of a resurgence a poor monsoon season could adversely affect demand in the coming months. FADA added that two-wheeler sales could remain subdued going forward due to the subdued rural demand while the passenger vehicle segment could face speed bumps due to the upcoming Shraad period and customer expectations for higher discounts.