The Federation of Automobile Dealers Associations (FADA) is optimistic that October will see brisk business in 24 of the 31 days.
According to a press release issued on Tuesday sharing September retail numbers, dealers have reasons to believe that this will be the best festive season in a decade for the passenger vehicle segment. While the semiconductor supply crunch is gradually easing out, FADA has requested manufacturers to match supply as per demand.
Average inventory for PVs in end-September was 40-45 days and 45-50 days in the case of two-wheelers. According to FADA, the enquiry level in the two-wheeler space is showing positive movement and the key is to see a turnaround in entry-level bikes.
Rural India especially states like Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh and Jharkhand showed weakness especially in entry level 2Ws and PVs. While overall retail in PV will be at a decade high during this festive season, it is the 2W category which is cause for some concern
Manish Raj Singhania, FADA President, said September saw the inauspicious period of Shradh from 10th to 25th while the festive period began with Navratri on the 26th. “Due to this, the full potential for the month was not realised as it should have been,” he added.
When compared with September ’19, a pre-Covid month, total vehicle retails were down by -4% but narrowed the gap from previous months. The PV segment continues to show extremely healthy figures by growing 44% while 3Ws, tractors and CVs grew by 6%, 37% and 17% respectively. The 2W segment is yet to show signs of any revival “as it remains a drag” with a fall of 14% from September ’19 though it grew 9% YoY.
Due to increased input costs, 2W companies raised prices by five times in the last year. Apart from this, RBIs fight with inflation saw rate hikes which continued to make vehicle loans expensive. “While India is showing revival signs, Bharat is yet to perform. 2W especially entry-level vehicles are finding “extremely less buyers” thus dragging the entire segment, cautions FADA.
The 3W category continues to see a structural shift from ICE to EV. This is also reflected in the extremely healthy growth rate of e-rickshaws. Apart from better availability of vehicles with full range products including alternative fuels, customers have started using public transport and rickshaw service thus fuelling demand in this segment.
| CATEGORY | SEP'22 | SEP'21 | YoY % | SEP'20 | % Change w.r.t SEP'20 | SEP'19 | % Change w.r.t SEP'19 |
| 2W | 10,15,702 | 9,31,654 | 9.02% | 10,56,997 | -3.91% | 11,81,668 | -14.05% |
| 3W | 63,915 | 37,172 | 71.94% | 24,766 | 158.08% | 60,565 | 5.53% |
| E-RICKSHAW(P) | 32,153 | 14,227 | 126.00% | 6,884 | 367.07% | 13,622 | 136.04% |
| E-RICKSHAW WITH CART (G) | 1,720 | 1,190 | 44.54% | 630 | 173.02% | 367 | 368.66% |
| THREE WHEELER (GOODS) | 6,033 | 6,415 | -5.95% | 5,395 | 11.83% | 7,279 | -17.12% |
| THREE WHEELER (PASSENGER) | 23,960 | 15,282 | 56.79% | 11,796 | 103.12% | 39,195 | -38.87% |
| THREE WHEELER (PERSONAL) | 49 | 58 | -15.52% | 61 | -19.67% | 102 | -51.96% |
| PV | 2,60,556 | 2,37,502 | 9.71% | 2,03,300 | 28.16% | 1,80,347 | 44.47% |
| TRAC | 52,595 | 53,392 | -1.49% | 70,140 | -25.01% | 38,374 | 37.06% |
| CV | 71,233 | 59,927 | 18.87% | 41,084 | 73.38% | 60,939 | 16.89% |
| LCV | 43,076 | 37,536 | 14.76% | 31,246 | 37.86% | 38,377 | 12.24% |
| MCV | 4,847 | 4,549 | 6.55% | 2,396 | 102.30% | 4,163 | 16.43% |
| HCV | 21,318 | 15,271 | 39.60% | 5,487 | 288.52% | 17,316 | 23.11% |
| Others | 1,992 | 2,571 | -22.52% | 1,955 | 1.89% | 1,083 | 83.93% |
| Total | 14,64,001 | 13,19,647 | 10.94% | 13,96,287 | 4.85% | 15,21,893 | -3.80% |
According to the FADA release, while CVs grew by 19%, it is the HCV segment which showed a healthy growth of 40% YoY. Better availability of vehicles, festivities, bulk fleet purchase and the Centre’s continued push for infrastructure development have helped their cause.
The PV segment grew 10% YoY and 44% when compared to September ’19. Better availability due to easing semiconductor supply, new launches and feature-rich products have “kept customers glued to dealerships”. The waiting period continues to range between three and 24 months especially for SUVs/compact SUVs.
A breakup of the FADA data — collated on October 2 from 1,339 RTOs in collaboration with the Ministry of Road Transport & Highways — throws up some interesting insights. The big news in September was Honda Motorcycle & Scooter India overtaking market leader Hero MotoCorp (284,160 vs 250,246 units). TVS Motor followed with 170,796 units while Bajaj Auto trailed far behind with 105,914 units. Royal Enfield, Suzuki and Yamaha were next in line with 55,415, 54,256 and 43,390 units respectively.
The data shows the surge in sales of electric two-wheelers with Ola, Okinawa, Hero , Ampere and Ather accounting for sales of nearly 38,000 units of the total 10,15,702 units sold during the month (the corresponding figure for September ’21 was 931,654 units).
On the face of it, this may seem minuscule but it clearly shows a growing trend in customer acceptance of electric scooters. This is the reason why traditional players like Hero, Bajaj and TVS are embracing this with a vengeance along with others like Honda and Yamaha.
In the case of passenger vehicles (where data has been collated on October 2) Maruti Suzuki leads the registration pack with 103,912 units of the total 260,556 units in September. Hyundai and Tata Motors are in a tug-of-war right now with 39,118 and 36,435 vehicles each while Mahindra & Mahindra and Kia follow with 22,351 and 18,151 units respectively. Toyota is the only other automaker with sales of over 10K at 12,610 units while the others are all in the four digit range.
When viewed from the viewpoint of partnerships, Toyota-Suzuki is right on top with 116,522 units with Hyundai-Kia at 57,269 combined. Renault-Nissan has posted sales of 7,937 units (5,728 and 2,209 each) while Skoda Auto Volkswagen Group has 5,972 units. MG Motor India has posted numbers of 2,956 units in September.
On the question of partnerships, each of these entities are still fierce rivals in the market even though there are synergies at the backend. By the end of the day, they are categorical about the fact that it is imperative to build individual brand entities in this fiercely competitive market.
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