Rising vehicle prices, fuel costs subdue India's March auto sales: FADA

Rising vehicle prices, coupled with high fuel costs, subdued India's March automobile retail sales on a year-on-year (YoY) basis, the Federation of Automobile Dealers Associations (FADA) said on Tuesday.

FADA data showed a YoY fall of 2.87 per cent in overall automobile retail sales during the month under review.

The overall retail sales fell to 16,19,181 units last month from 16,66,996 units sold during the corresponding month of 2021.

Also, last month's overall retail sales figure, when compared to the March 2020 period, showed a decline of 29.99 per cent.

In March 2020, the overall vehicle retail sales stood at 23,12,868 units.

On a YoY basis, passenger vehicle (PV) retail sales last month fell by 4.87 per cent to 2,71,358 units last month from 2,85,240 units sold during the corresponding month of last year.

Similarly, two-wheeler retail sales YoY declined last month by 4.02 per cent to 11,57,681 units.

Besides, tractor retail sales fell by 8.16 per cent to 63,920 units.

However, commercial vehicle (CV) retail sales rose by 14.91 per cent to 77,938 units last month from 67,828 units sold during the corresponding month of last year.

In terms of FY22 data, total vehicle retail increased by 7 per cent on YoY basis but fell by 25 per cent when compared to FY20 which was largely a pre-Covid year.

Furthermore, except tractors' sales, which fell by 1 per cent, all other categories like '2W, 3W, PV and CV' grew by 4 per cent, 50 per cent, 14 per cent, and 45 per cent on a YoY basis, respectively.

"The 2W segment which was already a non-performer due to rural distress, saw further dampening due to rise in vehicle ownership cost coupled with rising fuel cost," said FADA President Vinkesh Gulati.

"PVs continues to see high demand and long waiting period as semi-conductor availability still remains a challenge even though supplies slightly improved from previous month. The Russia-Ukraine war and China lockdown will further dent supplies and hence press brakes on vehicle availability thus making waiting period more frustrating for customers."

According to FADA's outlook , with impact of Covid lockdown during last two Aprils in FY20 and FY21, April 2022 will see growth, though on low base.

"The near term outlook for Indian auto industry continues to remain a challenge as the on-going Russia-Ukraine war and China lockdown does not hint towards a smooth path. Crude is on a boil and hence fuel prices have been raised by around Rs 10," it said.

"This will continue to rise and further hit sentiments on lowering the spending. Along with this, increase in raw material costs have made OEMs increase the prices of their vehicles. While no dent in terms of demand has been seen in PV segment, it will definitely have its impact on 2W segment which is an extremely price sensitive market."