July retail vehicle sales dip; industry pins hope on festive season

The Federation of Automobile Dealers Associations (FADA) of India shows that retail vehicle sales in India has gone down in July as compared to the previous month. As per the report, heavy rainfall and flood like situation in North India has caused a slowdown in sales

The sales of two-wheelers dipped 6%, passenger vehicles fell 4% and tractors slumped 8%. Commercial vehicle retail sales closed flat at -0.2%. Meanwhile, the sales of three wheelers grew by 9% in July.

Also Read: Two-wheeler sales continue to fall in July

"July was particularly commendable for the 3W category, which registered an all-time high sale of 94,148 units, translating to a 74% YoY and 9 percent MoM growth,” FADA said in a statement.

However this year's July sales have done much better than the previous year. On a year-on-year basis, it has maintained a steady 10% growth with all vehicle categories recording a positive growth. Two-wheelers recorded 8% growth, three-wheelers saw a whopping 74% rise, passenger vehicles reported 4% surge and commercial vehicles saw 2% growth.

FADA president Manish Singhania said that despite challenges like Monsoon and a tilt towards EVs the two-wheeler segment has shown resilience.

“Despite challenges like heavy monsoons and a tilt towards EVs due to high fuel prices, 2W showed resilience in July '23, with increased demand and trust in reputable brands. The 3W segment's record numbers indicate industry potential and a growing EV interest. Yet, addressing issues like OEM support and dealer engagement remains crucial,” FADA president Manish Singhania said.

He also expressed his confidence on the industry picking up during the festive season and that the PV segment will benefit from new product launch coupled with high demand in the SUV category.

IMD's projection of a below average rainfall for August might be a challenge as it would lead to lower crop yields. This could impact the purchasing power, especially in rural regions, thereby impacting sales.