India’s auto market continues to boom, surpasses Japan in car sales
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New Delhi : The excitement and celebration is on in the Indian automotive industry. Federation of Automobile Dealers Association of India data for the month of July shows that all vehicle segments have registered positive growth. Continuing the positive momentum from the recent months, the retail sector witnessed a year-on-year growth of 10 per cent this month. The Indian automotive industry has recently overtaken Japan to become the third largest industry in the world after China and the US. Right now, when China and America are way ahead of India, the Indian automotive market is also making impressive progress. The passenger vehicle (car) category has been particularly impressive, with the launch of several new and updated models in a variety of body types and price segments, picking up the pace. Although, the two-wheeler category has been a matter of concern in this period as well, but the month of July saw positive growth in this category as well. However, sales of passenger vehicles are expected to pick up during the festive season starting from the third week of August.
SUV thrust in the car market
What has helped the automotive industry and the market in recent times is that demand here has remained strong. At the same time, there is a continuous decrease in the delivery time. According to FADA, the situation remains the same in all segments and categories. It is also impressive that passenger vehicle sales have registered a growth despite disruption in demand due to severe monsoon and flood-like situation in many parts of North India. It is no surprise that SUVs dominate the car market. Here, the sales of two-wheelers have also increased. According to Fada, while electric two-wheelers are being preferred, petrol-powered options are also being liked a lot.
Challenges continue in the sale of commercial vehicles
There are both challenges and opportunities as far as the commercial vehicle (CV) category is concerned. Stock availability and a boost to infrastructure projects continue to be a major factor, even as higher vehicle costs and severe monsoon proved to be a hindrance to demand in the month of July. Three wheelers are performing stronger than other types of vehicles with record sales in the month of July.
10 percent increase in retail sales
Retail sales of vehicles grew 10 per cent in July on strong demand across segments including passenger vehicles, two-wheelers and tractors. Auto dealers’ body FADA said on Monday that total vehicle sales increased to 17,70,181 units last month from 16,09,217 units in July 2022. In July, passenger vehicle sales grew by four per cent to 2,84,064 units as against 2,73,055 units in the same period a year ago.
Increase in orders as well
Federation of Automobile Dealers Association (FADA) President Manish Raj Singhania said that there was an increase in orders this month. However, sales were affected due to severe monsoon and flood-like conditions in North India. Retail sales of two-wheelers increased by eight percent to 12,28,139 units in the month under review, from 11,35,566 units in July 2022. Retail sales of commercial vehicles grew by two per cent year-on-year to 73,065 units last month. There was a strong growth of 74 per cent in retail sales of three wheelers. Tractor sales grew by 21 percent.
Sales are expected to increase in the festive season
FADA estimates that August is likely to be another strong month for the Indian automotive sector. The festive season in the country will start in the third week of August. A harmonious supply-demand balance is likely to benefit the two-wheeler segment in particular, while the launch of new models will definitely help in increasing the strength of the passenger vehicle segment. The demand for three wheelers may still be strong and the stalled demand in the CV category will strengthen the prospects.
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