3-wheelers & CVs retail sales grow 80% & 27% each in July but China-Taiwan crisis a worry

2-wheeler, passenger vehicle & tractor retail sales decreased 11%, 5% and 28% each, the auto body said in a press release. Dealers consider July to be a lean month before the festival season hits in August.

With the increased tensions between China and Taiwan, dealers fear that a threat of semiconductor shortage is looming yet again. Taiwan says China’s drills amount to a blockade – and spiralling tensions could have a knock-on effect on products around the world, local media reported.

“The 3W space continued to see demand recovery even though full recovery to pre-covid levels is still some time away. Digging deeper, it is clearly evident that e-rickshaws is the biggest mover in the segment. Demand recovery in 3W passenger category also shows that covid is now behind us as passenger movement has onc e again started gaining traction,” Vinkesh Gulati, FADA president said.

“CV retail figures continue to witness good demand as Government’s infrastructure push is helping customers in concluding their purchase. Apart from this, the Bus segment also witnessed beginning of demand recovery as educational institutions and offices are once again back to normal mode,” he added.

However, total vehicle retails saw a dip of 20% in comparison with July 2019, a pre-Covid month. PVs and tractors’

have grown 19% and 7% each. 2Ws, 3Ws, CVs fell 28%, 15% and 4% each.

Data shows some weakness in rural India. “High inflation, erratic monsoon and high cost of ownership continues to keep bottom of the pyramid customers at bay,” Gulati said.

With India witnessing an erratic monsoon in July, Kharif sowing as the area under paddy dipped by 13% at the end of the month. As a result, tractor sales, which were showing good growth till a month ago, posted a big dip.

The average inventory for PVs and 2Ws ranges from 20-25 days & 20-23 days respectively.

Data released earlier this month shows that OEMs witnessed a record PV sales in July, amid easing of component supply challenges that had disrupted production in the past year and a half.

” Even though there is a blip in July numbers, the industry is continuously introducing new models especially in Compact SUV segment. Along with this, a better supply in coming months will help in bringing down customer anxiety due to large waiting period,” Gulati said,

Industry estimates suggest that as many as 3,42,300 PVs were sold up 16% YoY. Before this, PV sales had peaked at 3,34,000 units in October 2020,
data shows.