November 2022 Registers Highest Ever Vehicle Sales: FADA

FADA (Federation of Automobile Dealers Associations) has shared data that shows that the overall car retail for November 2022 has increased by 26% YoY.

Highlights

1. November 2022 has seen the biggest sales in Indian Vehicle Industry's history
2. Data from the Federation of Automotive Dealers Association shows an increase of 26% YoY
3. 2W, 3W, PV, Tractors, and CVs increased by 24%, 80%, 21%, 57%, and 33%, respectively.

November 2022: Best Sales in Indian Vehicle Industry's History

November 2022 saw the biggest sales in the Indian vehicle industry's history, with the exception of March 2020, when retails were higher owing to the BS4 to BS6 changeover.

According to data supplied by the Federation of Automobile Dealers Associations (FADA), overall car retail for November 2022 increased by 26% year on year. All categories increased, with 2W, 3W, PV, Tractors, and CVs increasing by 24%, 80%, 21%, 57%, and 33%, respectively.

"Auto Retail in November '22 showed an overall gain of 26%," stated Manish Raj Singhania, President of FADA. The excellent run of seasonal sales has transferred the baton to the Great Indian Wedding Season (November 14 to December 14), where around 32 lakh marriages will be held throughout the country."

Highest Sales Growth Registered by 3-Wheelers in Nov-2022

The 3W category grew the most, by 80.34% year on year in November 2022, and by 4% when compared to 2019, a pre-COVID year. Notably, all 3W subcategories had a good increase.

"The category that was experiencing poor demand during COVID has now emerged as the fastest rising category due to favorable feelings and the removal of fear of lockdowns," Singhania explained.

In addition, electrification in the category continues at a rapid rate. As a result, the 3Ws remain the poster child for India's electric car adoption.

Passenger Vehicle Sales Grow 21.31%

India's passenger car sales, which had recently become a source of worry, increased by 21.31% year on year. In November 2022, a total of 300,922 PVs were sold, compared to 248,052 units in November 2021.

"Better availability of model mixtures in recent months, fresh launches, and increased rural demand continues to keep the market in good shape," Singhania noted. The compact SUV and SUV categories, together with higher version cars, continue to dominate."

However, when compared to November 2020 PV sales, the statistics fell by 1.78% YoY, with 306,385 PV units sold.

2Ws Rise Again in Nov 2022

The improving 2W sales numbers appear to have provided respite to the whole Indian car sector. In November 2022, this sector increased by 23.61% year on year to 1,847,708 2Ws, up from 1,494,797 in November 2021.

"This category is steadily reversing the tides from negative to positive, as seen by retail sales during the current wedding season," Singhania added.

According to FADA, solid car retails are also backed by the RBI's Consumer Confidence Data, which is still on the rise due to improved assessments of the general economic environment, employment, and family income.

Industry Further

FADA believes that the RBI's sustained rate hikes and the China Lockdown will be detrimental in the short run. However, the majority of OEMs have announced future price increases. To counteract this, OEMs have begun advertising discounts for slow-moving models and cheaper variations, as well as emptying their year-end supplies.

Notably, the RBI raised the repo rate by 35 basis points yesterday (225 basis points since May 22) and has hinted at further increases in the future. The repo rate has risen to 6.25%, the highest since February 2019.

Apart from the price increases stated by OEMs, this will result in increased financing costs and may erode customer trust, particularly in the 2W and entry-level PV categories. In addition, the Chinese blockade may have an impact on semiconductor supply.