AUGUST AUTO SALES UP 9% YOY, MONSOON WORRIES LINGER

The automotive retail industry has advised a cautious stance on dispatches, despite optimism in the dealership network over a robust year-on-year growth of 9 per cent sales in the month of August, in view of the sub-optimal rainfall which could potentially affect the forthcoming festive season.

- NIVEDITA MUKHERJEE

Signalling a good pick-up in festive bookings, figures of the last month by the Federation of Automobile Dealers Associations (FADA) show a robust year-on-year growth of 6 per cent for two-wheelers, passenger vehicles at 6.5 per cent, tractors rising 14 per cent and commercial vehicles up by 3 per cent.

Sequentially, on a month-on-month basis, the industry indicated positive performance with a 3 per cent growth in total auto retail sales, although the tractor segment experienced a substantial contraction. "Auto retail in August witnessed a promising growth, maintaining momentum similar to the preceding month. Concurrently, a 3 per cent MOM uptick suggests a reversal in short-term trends," said FADA President Manish Raj Singhania. During MoM, all segments experienced growth, with the exception of tractors, which saw a 19 per cent decline. Evaluated against pre-pandemic metrics, the overall retail sales exhibited a modest 1 per cent growth, indicating nascent signs of recovery. Nomura Ratings' dealer survey points towards a good pick-up in festive bookings but the same kind of response for 2Ws is is yet to be seen. "We do expect improvement. Government actions like reducing gas cylinder prices and potential reduction of fuel prices could offer support to the bottom of the pyramid. Overall, we believe the festive season should be strong this year for PVs. Healthy inventory, with a much higher supply for SUVs will support this. OEMs and dealers may also spend more on A&P to support sales," says Nomura expert Kapil Singh.