Passenger Vehicle Sales Grow 43 Per Cent In June 2021: FADA

The Federation of Automobile Dealers Association (FADA) reported retail sales for the month of June 2021, and the passenger vehicle sector grew by 43.45 per cent to 184,134 units. Total vehicle registrations stood at 12,17,151 units in June this year, registering a growth of 22.62 per cent. The strong performance does come on the back of a low base recovery from last year due to the pandemic. When compared to June 2019, total vehicle sales are still down by 28.32 per cent.

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Speaking about June 2021 sales, Vinkesh Gulati, President - FADA, said, "June witnessed re-opening for most of the states except the ones in the South. Due to this, the industry witnessed a high pent-up demand which was stuck in the system because of state-wide lockdowns. Passenger vehicles continued to see good demand as customers showed keenness in vehicles for observing social distancing and safety of their families. The two-wheeler category, though in green, witnessed a softer recovery as the rural market is taking time to get back from the post-Covid stress. Commercial vehicle segment saw staggering growth over last year, though on a very low base as there were product shortages due to BS-6 transition."

FADA is hopeful that the sales momentum from June will carry forward in July as well leading up to a strong festive season

He further said, "Overall, the industry is still not out of the woods. When compared to June 2019, we are still in the red by -28 per cent with three-wheelers and commercial vehicles taking the maximum hit as they are down by -70 per cent and -45 per cent respectively. Only tractors continued to grow as it was up 27% compared to June 2019."

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On a year-on-year basis though, all auto categories were green retail sales performing better in June 2021, as compared to June 2020. In the two-wheeler sector, retail sales increased by 16.90 per cent at 930,324 units last month, as against 795,819 units in June 2020. Sales were down by 30.47 per cent when compared to June 2019.

Commercial vehicles sales stood grew by 236.19 per cent to 35,700 units last month, up from 10,619 units in the same month last year. It was still down by 45.11 per cent over June 2019. Tractor sales grew by 14.27 per cent with 52,261 units sold in June this year. It was also the only sector to report numbers in green over June 2019 with a hike of 27.66 per cent.

Speaking on the outlook for July, FADA said it's positive that the sales momentum from June will be carried forward. The dealer association said, "With southern India opening up, we can expect a further pickup in demand. On a longer term, the auto industry is yet to see retail numbers comparable to FY2019.

Two-wheeler retail sales increased by 16.90% at 930,324 units last month, as against 795,819 units in June 2020.

FADA added, "Continued global semiconductor shortage is creating demand-supply mismatch thus restricting the growth of passenger vehicles. While the new virus mutants and a prediction of a third wave in August are affecting sentiments, the revival of monsoons in July after a pause of 2 weeks and a better vaccination drive rate continues to build some hope. We will therefore have to wait and watch how the overall economy shapes up over the next couple of months. We hence see demand to be a mixed bag and hope that recovery is back on track by the time Navratri and Diwali knock at our door."