Auto sales in India increased by more than 34% in July 2021: FADA


Auto sales in India increased by more than 34% in July 2021: FADA

India’s auto industry was trying to recover from the unprecedented slowdown in sales last year when the second wave of the pandemic struck it badly. And although automakers have struggled with sales for a few months, things are slowly improving as the number of new COVID-19 cases is under control in most parts of the country. It also led to the lifting of travel and business restrictions in the country, leading to growth in auto sales in the country. According to the Federation of Automobile Dealers Associations (FADA), new vehicle sales in India rose 34.12% last month compared to July 2020.

FADA noted that sales of four-wheeled passengers increased 62.9% last month compared to July 2020; a total of 2,61,744 four-wheeled vehicles were sold in India last month, up from 1,60,681 units in July last year. In fact, four-wheel sales grew even compared to July 2019, when 2,10,626 four-wheel units were sold in India. The dealership association attributed this growth to new launches and growing demand for compact and subcompact SUVs. And although the two-wheeler segment recorded sales growth of 27.56% last month (11 32,611 units) compared to the same period last year (8 87,937 units), the trade-in rate stay slow. This is due to the low demand in rural markets due to the high number of COVID-19 cases.

Going forward, FADA also expects robust growth in August 2021. However, he noted that the global semiconductor shortage is becoming an issue of concern for the passenger vehicle segment. The chip shortage has led to increased wait times as companies struggle to ramp up production. The spread of the COVID-19 Delta variant could also thwart the growth of the Indian auto industry.

FADA President Vinkesh Gulati said: “With the opening up of the entire country, July continues to see a robust recovery in auto stores as demand across all categories remains high. The weak base effect also continues to play its role. PV is witnessing strong demand, especially with buzz around new launches and compact SUV segments. The waiting period due to supply side constraints has persisted for several months and is now becoming a fundamental problem for OEMs. The 2W segment however continues to see positive year-on-year demand, the rate of recovery remains sluggish as customers at the bottom of the pyramid suffer from low disposable income and rural markets where covid cases were high during the 2nd wave. “

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