Festive baton shifts to Great Indian Wedding Season, November registers best-ever auto sales, except March 2020: FADA
- Along with weddings, the ongoing festive season has continued to help in bringing customers to the showrooms as on date, said FADA in its latest report.
- The retailer association attributes good growth in the three-wheeler segment to positive sentiments, fear of lockdowns subsiding and high electrification that the sector is seeing.
- Going ahead, hike in interest rates and price hikes by auto manufacturers might play spoilsport, said FADA which remains cautiously optimistic in the near term.
AdvertisementThe Great Indian Wedding season is driving auto sales across categories, the Federation of Automobile Dealers Associations (FADA) said on Friday, adding that the auto industry clocked its best ever sales in November 2022, except March 2020. In March 2020, the industry’s transition to better fuel efficient vehicles as per government regulations rang in high sales.
Auto retailing for November 2022 went up by 26% year-on-year, with all the categories be it two-wheelers, three-wheelers, passenger vehicles, tractors and commercial vehicles showing positive growth.
“The baton was passed by the positive run of festive sales to the Great Indian Wedding Season (from November 14 to December 14) where around 32 lakh weddings will be solemnised across the country,” FADA said in a press release.
In India, it’s customary for the father of the bride to gift either a car or a two-wheeler to the groom. Even in April and May this year, auto sales rose, especially in the two-wheeler segment, and were attributed to the busy wedding season by trade pundits, besides the low-base effect of the pandemic year.
Consumer sentiment has also picked up, leading to better sales. “The RBI’s latest Consumer Confidence Data suggests that buoyancy among customers is on a recovery path on account of better perceptions on general economic situation, employment, and household income. This, along with the ongoing festive season, has continued to help in bringing customers to the showrooms as on date,” FADA said.
Vehicle retail data for November 2022
|Category||November 2022||Growth over November 2021)||Growth over November 2020||Growth over November 2019 (Pre-Covid month)|
E-rickshaws drive three-wheeler sales
The three-wheeler category that includes auto rickshaws for passengers, goods and personal categories in addition to e-rickshaws and e-rickshaw with cart – is also showing phenomenal growth. The retailer association attributes this to positive sentiments, fear of lockdowns subsiding and high electrification that the sector is seeing. Passenger e-rickshaw sales grew by a massive 112.88% over November 2021 while e-rickshaws with cart grew 75%.
Tractor sales have also been healthy for the month, which is when the sowing of winter crops begins. “For Bharat, normally after the harvest starts, farmers get money in hand and this starts the spending cycle. We expect spending for auto sales to go up once the harvest comes into the market and farmers start getting money in their hands,” the release said. A lot of two-wheeler sales are dependent on rural recovery, in addition to tractors.
AdvertisementSpeed breakers ahead
In spite of the good momentum seen across categories, there could be many speed breakers ahead for the sector. Recently, the Reserve Bank of India announced its fifth interest rate hike that will drive up the borrowing costs of owning a vehicle, as a lot of them depend on vehicle finance. The latest rate hike now brings the repo rate to 6.25%.
“This will further lead to a higher cost of borrowing apart from the price hikes done by OEMs (original equipment manufacturers) and may dent consumer confidence, specially in the 2W and entry level PV segment,” FADA said.
Auto companies have also announced price hikes to offset the cost of high input prices. Maruti Suzuki was the first to announce a price hike from January next year, adding that price hikes will vary across models. Luxury car maker Audi too said that it will hike vehicle prices by up to 1.7%, starting January. A PTI report has said that Tata Motors is mulling a price hike for passenger vehicles from next month.
“Along with this, the China lockdown may play its part in slowing the supply of semiconductors. If this happens, it may act as a speed breaker and add to supply-demand mismatch, which was improving since (the) last few months,” said FADA, which remains cautiously optimistic in the near term.
Rate hike to affect housing demand in the mid and affordable segments, say experts
End of revenge spending? Urban spending to taper off in the next few quarters, says Motilal Oswal
Popular on BI
- Micron begins construction on $2.7 bn India semiconductor plant in 'epic' beginning
- India, Japan agree to strengthen economic cooperation including achieving progress on high-speed railway project
- India rises to No 1 in ODIs, becomes top ranked team in all formats
- Discover what's new in iOS 17: Your ultimate guide to the latest features
- Hyderabad-based ethnic retailer Sai Silks Kalamandir IPO subscribed 4.4x