New Delhi:
Passenger vehicle registrations saw 25% growth to 2,64,342 units during the month of April 2022, owing to the low base of last year, says the data shared by the Federation of Automobile Dealers Associations (FADA) based on VAHAN.Retail sales of two wheelers were also up 38% to 11,94,520 units in April 2022, as against 8,65,628 units in April 2022.
According to the dealers’ body report, total vehicle registrations at regional transport offices (RTOs), which are proxy for sales, also grew 37% to 16,27,975 units over April last year.
All the segments were in green during the month.
Vinkesh Gulati said, “The month of April saw similar Auto Retail figures as March’22. While YoY comparison with April’21 shows all categories in green with high growth rate, it is important to note that both April’21 and April’20 were affected by nation-wide lockdown due to phase 1 and 2 of the Covid wave which witnessed no to negligible business. Hence a better comparison will be with April’19 which was a normal pre-covid month. April’22 when compared with April’19 reveals that we are still not out of the woods as overall retails were down by -6%.”
“Apart from PV and Tractors which grew handsomely by 12% and 30%, 2W, 3W and CV are yet to turn green as these categories were down by -11%, -13% and -0.5% respectively. With the Russia – Ukraine war continuing and China under lockdown, the global Auto Industry continues to witness supply crunch as semiconductor shortage along with high metal prices and container shortage prevails. Customers of the PV segment hence continue to witness long waiting periods,” he said.
“The 2W segment which has witnessed slight increase in sales when compared to last month is extremely sensitive to price hikes and continues to remain below pre-covid levels. It is a clear sign that Bharat has not been keeping up with India. Apart from rural distress, multiple price hikes coupled with high fuel prices are keeping price sensitive entry level 2W customers away. The CV segment after a long downturn which began post the announcement of axle load norms in 2018 is now witnessing demand recovery as all subcategories continue to inch north. Government’s push for infra spending further aids sale,” Gulati added.
Commercial vehicles saw an uptick of 52% to 78,398 units as against 51,515 units in april 2021. All the categories in this segment including LCV, MCV and HCV were in green.
About the near-term outlook, FADA President said, “The Russia – Ukraine war and China lockdown will continue to create demand-supply mis-match thus delaying the availability of PVs. This coupled with RBIs out of turn announcement of increasing reporate by 45 bps has taken everyone off-guard. The move will curb excess liquidity in the system and will make auto loans expensive. While PV segment may be able to absorb this shock due to long waiting periods, 2W segment is already reeling due to underperforming rural market, vehicle price hikes and high fuel costs. High interest rates for vehicle loan will be an additional blow for this segment. Certainly, this move will slow the speed of auto retail and dampen the sentiments further. On the other hand, Private consumption is regaining traction backed by a recuperating contactintensive services and rising discretionary spending.”
“Also, Skymet has come out with its normal monsoon forecast. If the same is evenly distributed, it will have a positive rub-off on rural sentiment as farmers will be able to get better crop realisation thus increasing their disposable income. It will thus benefit Tractor and 2W sales. This along with marriage season in coming days will also see a traction in Auto Retail. Overall, FADA changes its stance from extremely cautious to cautious in terms of slight recovery in near term,” he said.
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In the current financial year, the month of April continued to witness supply side constraints for the passenger vehicle segment, despite good demand. The two wheeler segment, however, has shown signs of recovery with a double digit year-on-year growth, driven by uptick in motorcycle business. Three wheelers, commercial vehicles and tractor segments remain positive.
Home, auto and other loan EMIs are likely to go up after the Reserve Bank of India (RBI) hiked its key interest rate by 40 bps in an unexpected move on Wednesday to tame the rising inflation that has remained stubbornly above target in the recent months.
