The total vehicle retail sales for the month of July 2022 saw a dip of 8% as compared with July 2021 and a drop of 20% when compared with July 2019, data from the Federation of Automobiles Dealers Association showed on Thursday. Except for 3W and CV, which continued to show growth of 80% and 27%, all the other categories like 2W, PV, and tractor fell by 11%, 5%, and 28%, respectively.
Auto sales fell 8% in July; 2-wheeler & PV sales dip 11% & 5% each
However, when compared with July 2019, PV and Tractor continued to outperform by growing 19% and 7%, respectively. All the other categories were in red, with 2W, 3W, and CV falling by 28%, 15%, and 4%.
Overall auto retail stood at 14,36,927 units in July 2022, down from 15,59,106 units in July 2021. When compared with July 2019, the overall sales were down by 3,57,370 units.
In July 2022, passenger vehicle (PV) retail sales stood at 2,50,972 units. This was 5 per cent down compared to the 2,63,238 units sold in July 2021. while two-wheeler sales stood at 10,09,574 units. In July of last year, it stood at 11,33,344 units. Tractor sales fell 28% last month to 59,573 units, down from 82,419 units in July 2021.
Commercial vehicle sales stood at 66,459 units last month, up from 52,197 units in July last year. It, however, posted a growth of 27%.
|Category||July -2022||July -2021||YoY (%)||July -2020||% change w.r.t July -20||July -2019||% change w.r.t July -2019|
July saw an erratic monsoon across most of the states. While west, central, and south India majorly faced excess rainfall, the Gangetic plains and eastern India witnessed deficient rainfall. This has hit hard the sales of tractors. Tractor sales, which were showing good growth until a month ago, saw a big dip in July, said Vinkesh Gulati, president of the Federation of Automobile Dealers Associations (FADA).
Furthermore, demand for two-wheelers has been low as rural India continues to underperform. This, coupled with high inflation, an erratic monsoon and a high cost of ownership, continues to keep bottom-of-the-pyramid customers at bay, Gulati noted.
Even though full recovery to pre-COVID levels is still some time away, demand in the 3W space has continued to recover, he said. Digging deeper, it is clearly evident that e-rickshaws are the biggest mover in the segment.
Demand recovery in the 3W passenger category also shows that COVID is now behind us as passenger movement has once again started gaining traction.
“CV retail figures remain strong as the government's infrastructure push assists customers in completing their purchases. Apart from this, the bus segment also witnessed the beginning of demand recovery as educational institutions and offices are once again back in normal mode,” Gulati added.
The PV segment is witnessing a dream run as retail sales are already higher than in 2019. Even though there is a blip in July numbers, the industry is continuously introducing new models, especially in the compact SUV segment. Along with this, a better supply in the coming months will help in bringing down customer anxiety due to the large waiting period. "We also urge all PV OEMs to recalibrate their supplies as per the market demand and avoid pushing low-moving stocks," he said.
In passenger vehicles, Maruti Suzuki lost its market share to 39.17% from 43.54% in July 2021, but it still remains in the top place. Hyundai Motors' market share fell by 1.17 per cent year on year. In comparison, Tata Motors increased its share to 14.36% from 9.54%. M&M has a 7.69% market share in PV, while Kia and Toyota have 6.89% and 4.89%, respectively.
In the tractor segment, Mahindra and Mahindra led the market share with 24%.
Tata Motors led the commercial vehicle market in July 2022 with a market share of 40.49 per cent, followed by Mahindra and Mahindra, with a share of 24.79 per cent, and Ashok Leyland, with a share of 14.72 per cent.
Overall, Tata Motors increased its market share both in the CV and PV segments.
Near Term Outlook
“July saw a shortage of monsoon where some states got less rainfall while others got more than required. The unfavourable weather resulted in decreased Kharif sowing as the area under paddy dipped by 13% at the end of July,” Gulati said.
After the Russia-Ukraine war, the world is once again facing the threat of a Taiwan-China war. Due to this, the danger of a semiconductor shortage is once again looming, he said as chip-maker TSMC raises a red flag that if war hits, Taiwanese chip manufacturers will be rendered "non-operable."
India’s services sector PMI (purchasing manager’s index) fell to a 4-month low in July at 55.5, showing that growth momentum lost steam as a result of weaker sales growth and inflationary pressure in the previous month.
Overall, FADA remains cautiously optimistic due to the above factors as it enters the festival season.
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