According to the data released by the Federation of Automobile Dealers Associations (FADA) on Thursday, automobile retail sales in June recorded a 10% increase to 1.86 million units compared to 1.7 million units sold last fiscal year. However, the industry witnessed an 8% dip in month-on-month sales, indicating short-term deceleration.

All automobile categories showed a YoY growth in June, with two-wheelers by 7%, three-wheelers by 75%, passenger vehicles by 5%, tractors by 41%, and commercial vehicles by 0.44%.

Against the pre-Covid levels, the overall auto retail industry has marked a marginal decrease of 3%. The two-wheeler has been the only segment that is making the slowest progress. Meanwhile, the commercial vehicle segment experienced a 1.5% growth, surpassing the pre covid level for the first time after June 2019.

During June 2023, two-wheeler sales saw a 7% increase, to 1.31 million units compared to 1.22 million units sold a year ago. According to FADA, the two-wheeler sector faces supply constraints from some original equipment manufacturers, softer demand due to economic conditions, and higher entry-level bike costs.

According to a statement by FADA, “New model introductions, festive promotions and seasonal factors couldn’t markedly boost sales. A 12 per cent MoM drop was observed in two-wheeler sales, with electric vehicle sales witnessing a 56 per cent MoM decline, primarily due to the government reducing FAME subsidies, triggering extreme price hikes.”

FADA said three-wheelers are the major gainers in June 2023, with 75% growth to 86,511 units sold against the 49,299 units sold a year ago. The major driving force for this is the previous year’s low base effect and positive market sentiment. The shift towards electric vehicles continues to play a significant role in driving this growth.

The passenger vehicles saw a 5% increase in total sales, with 235,299 units sold against 281,811 units sold during June 2022.

Another major player during the month was the tractor segment, which showed a 41% increase in sales compared to the previous year. In contrast, the commercial vehicle sector showed a marginal growth of just 0.44%.

“The CV segment confronted mixed dynamics influenced by inconsistent demand, supply issues, government policies and external market factors. Despite fluctuating demand and vehicle availability issues, the government’s infrastructural push and coal mining growth spurred demand for heavy commercial vehicles, counteracted by high-interest rates and rising prices,” FADA said.