Auto retail sales up in Jan, but lag pre-pandemic numbers

Vehicle registrations, a proxy for retail sales, increased across categories last month with consumer demand remaining strong in the new year. Data available with the Federation of Automobile Dealers Association (FADA) showed that overall, retail sales of vehicles rose 13.56% to 1.83 million units in January. Sales were, however, lower by about 8% compared with the pre-Covid January 2020.

FADA president Manish Raj Singhania said all automobile categories saw an increase in retail demand last month. Registration of two-wheelers, three-wheelers, passenger vehicles, tractors and commercial vehicles rose by 10%, 58.59%, 21.92%, 7.96% and 16.34%, respectively, in January.

Singhania said while sales of two-wheelers grew when compared with the year-earlier period, the numbers were lower compared with the same month in 2021 and 2020 – by 7% and 13%, respectively. “While sentiments are improving at a snail’s pace and are better than what it (the level) was a year ago, the rural market is yet to fully come to the party as cost of ownership has shot up significantly while disposable income has not increased in the same ratio,” he said.

In the passenger vehicle segment, demand remained robust and breached pre-Covid levels with strong enquiry, healthy bookings and improved supplies aiding sales. Singhania, however, said the entry-level sub-segment is still feeling the pinch. “Apart from this, while the waiting period for some models have come down, compact SUVs, SUVs and luxury vehicles continue to witness minimum waiting of 2-3 months,” he added.