Auto Retail Sector Shows Steady Growth in July 2023: FADA

The Federation of Automobile Dealers Associations (FADA) has released the Vehicle Retail Data for July 2023, revealing a steady year-on-year (YoY) growth of 10 per cent in the auto retail sector. This growth mirrors the trend observed in the previous month. However, a month-on-month (MoM) analysis indicates a 5 per cent decline in retail sales, with exceptions noted in specific segments.

Manish Raj Singhania, President, FADA said, “Despite challenges like heavy monsoons and a tilt towards EVs due to high fuel prices, 2W showed resilience in July '23, with increased demand and trust in reputable brands. The 3W segment's record numbers indicate industry potential and a growing EV interest. Yet, addressing issues like OEM support and dealer engagement remains crucial.”

The data highlights a positive trend across all vehicle categories in terms of YoY growth. Two-Wheelers (2W) showed an 8 per cent growth, Three-Wheelers (3W) surged ahead with an impressive 74 per cent increase, Passenger Vehicles (PV) recorded a modest 4 per cent growth, tractor (Trac) exhibited a 21 per cent rise, and Commercial Vehicles (CV) experienced a 2 per cent growth.

In terms of MoM performance, the 3W segment stood out with a remarkable 9 per cent growth, while other categories faced challenges. 2W, PV, and Trac segments experienced reductions of 6 per cent, 4 per cent, and 8 per cent respectively. The CV segment remained almost flat at a marginal decrease of 0.2 per cent.

A comparison with pre-COVID levels shows a 13 per cent decline in overall retails, particularly, the 2W segment struggled with a significant 23 per cent dip, and CVs also underperformed with a 4 per cent contraction. The Three-Wheeler (3W) category stood as a highlight in July, achieving an all-time high sale of 94,148 units, reflecting a remarkable 74% YoY growth and a notable 9 per cent MoM growth. Passenger Vehicles (PV) inventory has surpassed the 50-day mark, hovering between 50-55 days. This suggests an inventory build-up in anticipation of the forthcoming festive season.

Looking ahead, the auto industry faces a blend of opportunities and challenges in August. Positive indicators include the anticipation of upticks in the 2W and 3W sectors driven by festivals and new model launches. The CV segment holds potential growth prospects due to the festive season and good monsoons, while the PV segment anticipates benefits from new product introductions and high SUV demand.