Car sales in June see robust growth as new launches provide surge: FADA

The Federation of Automobile Dealers Association (FADA) on Tuesday released vehicle retail data for the month of June and underlined the gradual return to some form of normalcy in the Indian automotive market with passenger vehicles paving the way forward. While high waiting time for select models remains a challenge, FADA notes that new model launches last month provided the boost to vehicle retail.

The data released shows all categories in the Indian automobile industry - two-wheelers, three-wheelers, passenger vehicles, tractors and commercial vehicles - registering a growth last month when compared to the Covid-19-hit month of June of 2021. Sales of passenger vehicles last month were up 40 per cent vis-a-vis June of 2021. But while retail picking up in comparison to the same period last month was on expected lines, FADA especially notes how new model launches are helping boost witnessed in the passenger vehicle segment. “The PV segment continued to see robust growth. An increase in wholesale clearly shows that semi-conductor availability is now getting easier," said Vinkesh Gulati, FADA President. “New vehicle launches are seeing robust booking thus reflecting healthy demand pipeline."

Most car manufacturers in the country are reporting strong demand and point to component shortage as a stumbling block. But if the situation does ease, it could be a major shot in the arm for companies which have at least two months of order bank intact. FADA, however, still points to high fuel prices and inflationary pressures as potential pain points. But the impact of these is likely to be most felt in the two-wheeler segment. Poor market sentiment especially in rural India, high cost of ownership, inflationary pressure and June generally being a lean month due to rains kept 2W sales at low speed," noted Gulati.

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All eyes now would be on how the entire situation plays out in July and August because the following festive period is when the auto industry's performance truly signals consumer sentiments and puts out a holistic impression.