Auto shipments to the domestic market in July including all categories rose 10% year-on-year, an automakers association said on Friday.
Automakers in India count deliveries to dealerships as sales. A surge in passenger vehicles (PV), including cars, vans and utility vehicles, supported sales, the Society of Indian Automobile Manufacturers (Siam) said in its monthly statement. Improved availability of semiconductors has helped PV manufacturers to speed up production.
PV sales in the month rose 11% to 293,865 units from 264,442 units a year ago, as production increased to 358,888 units from 333,369 units. Sales volume does not include Tata Motors, which is the third largest in the pecking order.
Including Tata Motors, total PV sales for the month would have been 324,050 compared to 311,947 units in the same month last year.
A series of new model launches in the SUV segment, coupled with improved electronic and electrical component supply and strong demand, have kept PV sales in the world’s fifth-largest automotive market in high gear for four consecutive months. This is despite an incessant increase in key rates which have made borrowing more expensive.
July 2022 was the seventh consecutive month that headline retail inflation remained at or above the central bank’s upper tolerance level of 6%. The RBI panel raised the key rate by 50 basis points to 5.4% last week in its bid to rein in inflation. Led by commercial vehicles, overall PV sales (including cars, vans and UV) in the first quarter exceeded peak FY19 volumes and are expected to reach a new high at the turn of the current fiscal year .
Cumulative sales (all segments excluding commercial vehicles) reached 1,706,545 units from 1,542,716 units in the month, the industry body said.
The improvement in three- and two-wheeler sales came on a weak base and volumes were lower than in 2006 and 2016 respectively, SIAM chief executive Rajesh Menon said in the statement.
“The market for entry-level passenger cars, two-wheelers and three-wheelers has yet to recover.” The third repo rate hike to contain high inflation will make auto loans more expensive, making it harder for entry-level vehicles to pick up, he said.
Two-wheeler sales in the month rose 9.6% to 13,81,303 units while three-wheeler sales were up 22.16 to 31,324 units year-on-year.
The government’s recent decision to allocate more domestic gas to CNG will help CNG-powered vehicles. “We hope that, in line with the government’s intention, gas companies will pass on the full benefits to end consumers by reducing retail CNG prices,” Menon said.