On YoY basis, total vehicle retail for Jan’23 grew by 14% YoY. All categories were in the green with 2-Wheeler, 3-Wheeler, Passenger Vehicle, Tractor, and Commercial Vehicles growing by 10%, 59%, 22%, 8%, and 16% respectively.
While the 2-Wheeler segment showed growth on a YoY basis, it fell by 13% when compared to the pre-pandemic level of January’20. This clearly shows that rural India is still not out of wood.
The 3-Wheeler segment has shown tremendous resilience and has almost clawed back to pre-pandemic levels with a de-growth of a mere -3% when compared to January’20.
The Passenger Vehicle category continues to see robust growth despite the entry-level sub-segment which is yet to fire.
Both, Tractor and Commercial Vehicles continue to grow above the pre-pandemic levels of January’20 by growing 9.5% and 6% respectively.
On the global front, China’s re-opening will help better the supply chain thus improving the supply of vehicles and reducing the vehicle waiting period.
Budget 2023-24 will aid the overall growth of Automobile retails in times to come.
The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for January’23.
Commenting on how January’23 performed, FADA President, Mr. Manish Raj Singhania said, “January’23 witnessed total retail rising by 14% YoY but was still down by 8%, when compared to pre-covid month of January’20. All categories were in green with 2-Wheeler, 3-Wheeler, Passenger Vehicle, Tractor and Commercial Vehicles growing by 10%, 59%, 22%, 8% and 16% respectively on YoY basis.
The 2-Wheeler category showed a growth of 10% YoY but when compared to 2021 and pre-covid month of January’20, it continued to see pressure as the same fell by 7% and 13%. While sentiments are improving at a snail’s pace and are better than what it was a year ago, rural market is yet to fully come to the party as cost of ownership has shot up significantly while disposable income has not increased in the same ratio.
The 3-Wheeler segment has seen 60% growth YoY, 101% growth when compared to 2021 and is now slightly down by mere 3% when compared to pre-pandemic levels in January’20. EV fame-2 subsidy along with demand from commercial 3W space is fuelling healthy growth.
The Passenger Vehicle segment continues to perform well with growth of 22% YoY, 10% from January’21 and 8% from pre-covid month of January’20. While good enquiry, healthy bookings and improved supplies are helping aid this segment, it is the entry level sub-segment which is still feeling the pinch. Apart from this, while waiting period for some models have come down, compact SUVs, SUVs and luxury vehicles continue to witness minimum waiting of 2-3 months.
The Commercial Vehicle category has also shown robust growth by growing 16% YoY, 23% from January’21 and 6% from pre-covid month of January’20. Continued demand in the market due to replacement of fleet, growth in freight availability and government’s consistent push for infrastructure projects has helped the CV segment rise above pre-covid numbers.”
Near Term Outlook
With China’s factory activity once again gaining pace, global supplies of parts and semi-conductors will see a recovery thus aiding better vehicle supplies and lower waiting period in future. This will further fuel growth for the already healthy Passenger Vehicle category.
The economic survey 2022-23 tabled in parliament said that rural wages will rise at a steady positive rate as inflation is expected to soften thus translating into rise in real wages. We are hopeful that this will have its rub-off effect with rise in 2-Wheeler sales going ahead.
The recent announcements in Budget 2023-24 will help aid overall growth of Automobile Retails. Demand of entry level 2-Wheelers and entry level PV is likely to accelerate due to enhanced income tax rebate, budget allocation for vehicle scrappage policy and import duty exemption for manufacturing lithium batteries thus reducing EV acquisition cost. A reduction in surcharge at the highest IT slab will also benefit high end vehicle sales. Apart from this, the capital outlay of Rs 10 Lakh Cr for Infrastructure spending will help aid CV sales which is already witnessing an upswing.