As the chip shortage is easing out, it is evident that passenger vehicle sales will continue to reman in the upswing for Q2 & Q3, going by the recent figures shared by FADA – Federation of Automobile Dealers Association. For Jun. ‘22, sales of PVs grew 27% over the same month in 2019. Commercial vehicles – trucks, mini vans, school buses, etc., grew 3% and Tractors grew a whopping 40%. The onset of monsoon as per predicted time will certainly propel the agri-sector, which in turn shall have a domino effect on the overall economy as well as other sectors.
What is seemingly worrisome is the sale of 2W has dropped 16.4% over 2019. Multiple reasons could be attributed to this. In Q2 FY2122, price of petrol per litre touched almost Rs. 100 across India. The daily increase was stopped around Deepavali for over 100 days, after which it has been hovering around Rs. 110 per litre now. Add to that, food inflation caused by various internal and external factors, nil or minimal salary increment at private sector jobs and a shrinking household saving have added to the woes of the middle classes in India. Sales of 3W – passenger and commercial autos also declined marginally in Jun. ‘22 by 5.7%. Increased preference in metro cities to mass transportation modes such as public buses & the Metro rail could be an important reason why the dependence of Autorickshaws has reduced.
The waiting time for compact SUVs such as Hyundai Creta and premium SUVs such as XUV700, Tata Safari, etc. continues to remain 3-4 months or more. Clearly indicates that the “haves” have it to consume while the aspirational middle class is finding the going tough. With schools and colleges reopening in full swing, most offices filling up their floors fully, it is expected that Q3 could witness a higher consumer spending, resulting in higher sales of automobiles, eventually.