scorecardAs auto sales slip in July, dealers pin hopes on upcoming festive fervour
  1. Home
  2. business
  3. auto
  4. news
  5. As auto sales slip in July, dealers pin hopes on upcoming festive fervour

As auto sales slip in July, dealers pin hopes on upcoming festive fervour

As auto sales slip in July, dealers pin hopes on upcoming festive fervour
Business4 min read
  • The Indian auto industry reported a 10% year-on-year increase in sales in July 2023, while reporting a 5% month-on-month decline.
  • The two-wheeler and commercial vehicles segment are still performing below the pre-pandemic levels.
  • FADA expects good sales due to the festive season but a weak monsoon may play spoilsport.
The Indian auto industry reported a 10% year-on-year increase in sales in July, just like the last month. However, the sales have declined by 5% on a month-on-month basis when compared to June 2023.

According to a report by the Federation of Automobile Dealers Associations (FADA), all categories reported a year-on-year growth in July 2023. Except 3-wheelers, all other categories reported a month-on-month decline in July 2023.
July 2023 auto sales data


July 2023

YoY change

MoM change









Passenger vehicles








Commercial vehicles








Source: FADA Research

Two-wheelers still below pre-covid levels
The two-wheeler segment reported an 8.15% year-on-year growth in July 2023. Despite this, the segment reported a decline of 23% when compared to the pre-COVID levels. When compared to June 2023, there was a 6.26% decline in sales. At the end of the month, companies had an inventory of 20-22 days.

“The 2W sector expects an uptick, driven by upcoming festivals, a harmonious supply-demand equilibrium and the rollout of new models. However, challenges loom on the horizon. The 2W segment's entry-level category continues to be a cause for concern,” said FADA in its report.
Three-wheeler segment picks pace with a new high
The three-wheeler segment was the clear winner in July 2023, recording a new high of 94,148 vehicles, a 74.35% year-on-year increase. It is also the only segment that recorded a month-on-month increase at 8.83%.

“The 3W category is witnessing a surge in interest, particularly towards electric variants,” FADA said.
Passenger vehicle segment in the slow lane
The passenger vehicle segment has reported decent growth at 4.03% year-on-year. As compared to June 2023, the sales declined by 3.8%. While passenger vehicles reported an increase in sales, flood-like situations in North India reportedly had an adverse impact on the sales.

Ahead of the festive season, the inventory for the passenger vehicles segment is hovering around the 50-55 days mark, indicating a build-up.

“The month saw a surge in orders and timely OEM supplies, especially with the introduction of new products. However, severe monsoons and flood like situations especially in North India, impacted sales. SUVs continued to remain a popular choice,” FADA said in its report.
Commercial vehicles record growth but…
The commercial vehicle segment reported a 2.02% year-on-year growth in July 2023 but was 4% below the pre-pandemic levels. On a month-on-month basis, the commercial vehicles segment reported a 0.2% decline.

“The CV segment showed mixed dynamics. Despite robust stock availability and growth in areas like school buses, challenges from erratic weather and high vehicle costs affected demand. However, infrastructure project boosts remain a silver lining,” said FADA.

Coming to the outlook for the CV segment, FADA is optimistic but loan disbursements are a cause for concern.

“In the realm of CV, the anticipation of the festive season, the aftermath of a good monsoon and pent-up demand set the stage for potential growth. However, there are apprehensions regarding streamlined loan disbursements for buyers,” said FADA.
Weak monsoon may play spoilsport
While retail sales are expected to increase as we approach the festive season, predictions of below-average rainfall may impact sales.

“A larger concern is the IMD's projection of a below-average rainfall in August, potentially leading to lower crop yields. This could impact the purchasing power, especially in rural regions. While the industry has experienced a tepid trend over the past two months, FADA remains watchful in the short term. Nonetheless, there's optimism about a rise in retails as we approach the festive season,” FADA added in its report.


Poco M6 Pro 5G vs Redmi 12 5G – the sub-₹12,000 5G phone battle

Indian smartphone market sees a declines in Q2; Vivo in the lead

Electric two-wheeler sales recover after spending June in the pitlane