FADA President, Manish Raj Singhania, is confident that passenger vehicles sales will touch a new peak this year.
“We can very well see that pre-COVID levels have long been surpassed this year and expect record-breaking sales. There is going to be all-time high sales this year,” he told Mobility Outlook.
FADA data for August 2022 shows that PV sales are up 6.51% over last year’s corresponding month and 41.31% more than August 2019. According to Singhania, with the current monthly average of 2.5 lakh units, total sales will be around 30 lakh units by the end of FY23.
The 42-day festive season will be a further booster in surpassing pre-pandemic sales, he added. The supply chain issue has been a dampener for many months, but with the semiconductor shortage now easing off, PV sales are growing rapidly, he added.
Recent launches have also contributed to buying sentiment, as is in the case of Mahindra’s XUV 700 and Maruti Suzuki’s Vitara Brezza, which have received over one lakh bookings in their first month of launch. The upcoming Grand Vitara has also accumulated over 50,000 bookings.
“PV makers continue to have a heavy order book and there is no dearth of customers. The better the supplies, the better will be the performance of the segment,” said Singhania.
The same positive sentiments, however, do not extend to two-wheelers where sales grew by 8.5% YoY in August but still not above 2019 levels. According to him, changes in regulations have made the acquisition cost higher, which has hit entry-level two-wheelers.
“A BS 4 entry level model which was costing around INR 38,000-40,000 is now INR 60,000 — almost 50% plus in terms of costs,” he said. Moreover, the hike in fuel prices has also hit two-wheeler sales. “Every single rupee increase has affected customers’ daily management of funds and dampened recovery prospects,” said the FADA president.
Against this backdrop, a shift to electric scooters is only logical, but with lack of sufficient options from traditional OEMs coupled with incidents of fire from startups have not helped matters.
Singhania said that while traditional OEMs have created a sense of comfort and trust among their customer base, new-age EV players are yet to do so. Once the big names in the 2W industry come up with more E2Ws and startups showcase some really good quality products, the industry might stage a strong comeback.
The two-wheeler segment has also been hampered by fewer launches unlike passenger vehicles. “ICE two-wheeler launches have also been very slow and it is only new products that attract customers and make them euphoric,” he added.
Commercial vehicle sales have been buoyant and grew by 24.12% over August 2021 and 6.51% over ’19. According to Singhania, the Centre’s infrastructure push, coupled with new launches and better conversion in fleet operations, have been huge boosters. The passenger carrier segment also shows good demand with increased buying from educational institutions.
Tractor sales, meanwhile, were a dampener and posted a de-growth of 31.72% compared to August’ 21 levels. When the pandemic first broke out in 2020, and lockdowns were implemented, people moved back from cities to their villages and bought tractors to earn their livelihoods. Tractors also have a variety of applications, like transporting people.
Hence, continued Singhania, they were the ideal commercial source during COVID times and, consequently, August’ 21 saw record sales of 72,208 units. Even while numbers are down now, he said this is a cyclical industry which depends on good monsoons. “This is happening now and tractors will come up with the requisite numbers and we can again see new heights attained,” he said.
Also Read
FADA Optimistic About Festive Season As Vehicle Sales Rise In August
Indian Auto Industry Enters Festive Season With A Positive Sentiment