Brief Analysis for April’22

• On YoY basis, total vehicle retail for the month of April’22 increased by 37%.
• On YoY basis, all categories were in green. 2W, 3W, CV, PV and Tractors were up by 38%, 96%, 25% and 26% respectively.
• Auto Retail has still not recovered from the jitters of Covid. When compared with April’19, total vehicle retail was down by -6%. Except PV and Trac, which were up by 12% and 30%, all the other categories like 2W, 3W and CV were down by -11%, -13% and -0.5% respectively.
• RBI’s move of increasing repo rate by 40 bps has clearly taken everyone off guard. This move will apply brakes and dampen the sentiments further.
• Skymet has recently predicted a normal monsoon. This will have a positive rub-off on rural sentiment which thus far has shown lacklustre performance. Tractor and 2W sales likely to improve if monsoons are evenly distributed. 

MUMBAI, 4^th MAY, 2022 (GPN): The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for April’22.

April’22 Retails

Commenting on how April’22 performed, FADA President, Mr. Vinkesh Gulati said, “The month of April saw similar Auto Retail figures as March’22. While YoY comparison with April’21 shows all categories in green with high growth rate, it is important to note that both April’21 and April’20 were affected by nation-wide lockdown due to phase 1 and 2 of the Covid wave which witnessed no to negligible business. Hence a better comparison will be with April’19 which was a normal pre-covid month. 

April’22 when compared with April’19 reveals that we are still not out of the woods as overall retails were down by -6%. Apart from PV and Tractors which grew handsomely by 12% and 30%, 2W, 3W and CV are yet to turn green as these categories were down by -11%, -13% and -0.5% respectively. 

With Russia – Ukraine war continuing and China under lockdown, the global Auto Industry continues to witness supply crunch as semi-conductor shortage along with high metal prices and container shortage prevails. Customers of PV segment hence continues to witness long waiting period.

The 2W segment which has witnessed slight increase in sales when compared to last month is extremely sensitive to price hikes and continues to remain below pre-covid levels. It is a clear sign that Bharat has not been keeping up with India. Apart from rural distress, multiple price hikes coupled with high fuel prices are keeping price sensitive entry level 2W customers away.

The CV segment after a long downturn which began post the announcement of axle load norms in 2018 is now witnessing demand recovery as all sub-categories continue to inch north. Government’s push for infra spending further aids sale.”

Near Term Outlook

The Russia – Ukraine war and China lockdown will continue to create demand-supply mis-match thus delaying the availability of PVs. This coupled with RBIs out of turn announcement of increasing repo-rate by 45 bps has taken everyone off-guard. The move will curb excess liquidity in the system and will make auto loans expensive.

While PV segment may be able to absorb this shock due to long waiting periods, 2W segment is already reeling due to underperforming rural market, vehicle price hikes and high fuel costs. High interest rates for vehicle loan will be an additional blow for this segment. Certainly, this move will slow the speed of auto retail and dampen the sentiments further.

On the other hand, Private consumption is regaining traction backed by a recuperating contact-intensive services and rising discretionary spending. Also, Skymet has come out with its normal monsoon forecast. If the same is evenly distributed, it will have a positive rub-off on rural sentiment as farmers will be able to get better

crop realisation thus increasing their disposable income. It will thus benefit Tractor and 2W sales. This along with marriage season in coming days will also see a traction in Auto Retail.

 

Overall, FADA changes its stance from extremely cautious to cautious in terms of slight recovery in near term.

 

Key Findings from our Online Members Survey

 

• Inventory at the end of April’22
  • Average inventory for Passenger Vehicles ranges from 15 – 20 days
  • Average inventory for Two – Wheelers ranges from 20 – 25 days

 

• Liquidity
  • Good                   53.0%
  • Neutral               36.1%
  • Bad                      10.9%

 

• Sentiment
  • Good                 46.0%
  • Neutral               38.1%
  • Bad                      15.8%

 

Chart showing Vehicle Retail Data

 

All India Vehicle Retail Data for April’22

CATEGORY	APR’22	APR’21	YoY %	APR’20	% Change w.r.t APR’20	APR’19	% Change w.r.t APR’19
2W	11,94,520	8,65,628	37.99%	3,18,596	274.93%	13,38,382	-10.75%
3W	42,396	21,640	95.91%	10,567	301.21%	48,733	-13.00%
PV	2,64,342	2,10,682	25.47%	22,079	1097.26%	2,36,217	11.91%
TRAC	48,319	38,306	26.14%	5,706	746.81%	37,011	30.55%
CV	78,398	51,515	52.18%	20,284	286.50%	78,781	-0.49%
LCV	43,928	28,573	53.74%	12,866	241.43%	43,904	0.05%
MCV	4,742	3,552	33.50%	1,630	190.92%	4,729	0.27%
HCV	26,461	16,076	64.60%	5,018	427.32%	27,200	-2.72%
Others	3,267	3,314	-1.42%	770	324.29%	2,948	10.82%
Total	16,27,975	11,87,771	37.06%	3,77,232	331.56%	17,39,124	-6.39%

Source: FADA Research

About FADA India

Founded in 1964, Federation of Automobile Dealers Associations (FADA), is the apex national body of Automobile Retail Industry in India engaged in the sale, service and spares of 2/3 Wheelers, Passenger Cars, UVs, Commercial Vehicles (including buses and trucks) and Tractors. FADA India represents over 15,000 automobile dealers having 26,500 dealerships including multiple Associations of Automobile Dealers at the Regional, State and City levels representing the entire Auto Retail Industry. Together we employ ~4 million people at dealerships and service centres.

FADA India, at the same time also actively networks with the Industries and the authorities, both at the Central & State levels to provide its inputs and suggestions on the Auto Policy, Taxation, Vehicle Registration Procedure, Road Safety and Clean Environment, etc. to sustain the growth of the Automobile Retail Trade in India.