Contrary to what automakers reported, FADA’s retail sales report depicts that overall vehicle sales in India has seen a drop of 3% in March 22 compared to March 21, while the sales dropped by 30% compared to March 20.
However, the industry reported an uptick growth of 7% in FY22 compared to FY21. Meanwhile, the report also suggested that compared to FY20, which was largely a pre-COVID year, the industry witnessed a downfall of about 25%.
In March 22, apart from the 3W segment and the CV segment, which reported a rise of 26.61% and almost 15%, respectively, YoY, every other segment witnessed a downfall.
Vinkesh Gulati, President, FADA, said that with India now completely opening up, the 3W segment is seeing strong double-digit growth compared to March 21 on YoY.
He further added that EVs contribute 45% market share in the 3W segment while having a strong demand for load vehicles from captive customers.
“CV’s continues to inch forward even though full recovery from FY20 perspective is still away. Sentiment for the segment remain positive as the government’s infra push coupled with replacement demand is driving sales,” Gulati added.
However,the worst-hit segment was the tractors which fell by 8.16% on a YoY basis compared to March 21. Interestingly, the segment reported a growth in March 21.
The 2W segment and the PV segment fell by 4.02% and nearly 5%, respectively in March 22 compared to March 21.
| Category | March, 2022 | March, 2021 | YoY (%) | March, 2020 | Change (%), March, 2020 |
| 2W | 11,57,681 | 12,06,191 | -4.02 | 18,47,314 | -37.33 |
| 3W | 48,284 | 38,135 | -26.61 | 77,184 | -37.44 |
| PV | 2,71,358 | 2,85,240 | -4.87 | 2,18,076 | 24.43 |
| Tractor | 63,920 | 69,602 | -8.16 | 53,477 | 19.53 |
| CV | 77,938 | 67,828 | 14.91 | 1,16,817 | -33.28 |
| - LCV | 45,945 | 38,740 | 18.6 | 70,653 | -34.97 |
| - MCV | 4,188 | 4,682 | -10.55 | 8,352 | -49.86 |
| - HCV | 24,169 | 18,699 | 29.25 | 33,563 | -27.99 |
| - Others | 3,636 | 5,707 | -36.29 | 4,249 | -14.43 |
| Total | 16,19,181 | 16,66,996 | 2.8 | 23,12,868 | -29.99 |
The FADA President stated that the 2W segment, which was already a non-performer due to rural distress, saw further dampening due to a rise in vehicle ownership cost coupled with rising fuel cost and urged all 2W OEMs to introduce special schemes to uplift the morale of this segment to boost sales.
In terms of PVs, he added that the Russia-Ukraine war and China lockdown will further dent supplies and press brakes on vehicle availability, thus making the waiting period more frustrating for customers.
Annual Report
Along with sharing the reports for March 2022, the apex body of the automotive dealers also released the annual numbers, which stated that apart from the tractor, which fell by a marginal 1.37% compared to FY21, every other segment witnessed strong growth.
However, similar to the monthly report, in FY22, the industry went down in sales compared to FY20 by almost 25%.
Gulati said, “Unlike last year, the lockdown this time around had been imposed by state governments and not the Central government. Many states continued to remain under lockdown even in May and for over 60 days thus impacting lives, economy and auto sales.”
The 3W segment in FY22 sold around 3,88,093 units which is 50.3% more than what the segment witnessed in FY21, selling 2,58,172 units.
Further, the CV segment grew by 45.13% in FY22 on a YoY basis to 6,52,125 units compared to 4,49,324 units in FY21.
While the 2W and the PV segment grew by 3.81% and 14.16%, respectively, YoY basis. The 2W segment added 4,39,487 units in FY22, while the PV segment added 3,38,122 units over the FY21.
The association predicts the near term outlook to be challenging for the industry as the ongoing Russia Ukraine war and China lockdown do not hint toward a smooth path.
Additionally, crude is on a boil, and hence fuel prices have been raised by around INR 10. This will continue to rise and further hit sentiments on lowering the spending, it added.
Gulati predicted that in FY23, the PV segment is expected to cross its peak with estimated overall sales of 31 lakh units.
While the tractor sales are expected at 6.5 lakh units and 2W segments are expected to add 8lakh additional units to its existing sales.
Anticipating a higher demand for EVs, FADA estimates sales of 5,00,000 to 10,00,000 units during the fiscal.
However, with all this, the industry is expected to see only single-digit growth, Gulati stated. “For the industry to hit the pre-COVID peak level, it is essential for the 2W segment to grow by leaps and bounds, which does not seem possible for the next two years,” he concluded.