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Faster auto uptake triggers hope of early economic revival

Healthy rise in automobile month-on-month sales has lighted up hopes of a steady pick-up in overall economic activity. Industry insiders cited the nil to double digit sales pickup in the last four months as ‘green shoots’ of a slow-but-steady rise in economic activity.

Considered as a discretionary spend, the trend in car purchases have shown a sustained uptick both on retail and wholesale basis. (Read: Volvo starts production of fully electric XC40 Recharge)

According to the Federation of Automobile Dealers Associations data, on a yearly comparison, passenger vehicles retail sales in September grew by 9.81 per cent to 1,95,665 units from 1,78,189 units off-take during the like month of last year.

In terms of the commercial vehicle (CV) segment, which represents the broad health parameters of an economy, there has been month-on-month improvement, analysts said.

The trend, they said, showed a steady influx of transportation orders, easing of Covid-19 restrictions and increased construction activity across the country.

However, on a YoY basis, CV sales remained deep in the red. (Read: Hyundai to recall Kona EV over faulty battery cells)

Nevertheless, tractor and two-wheeler sales have been unfazed by the downturn brought around by the pandemic.

As per the September retail data, tractor sales grew by 80.39 per cent to 68,564 units from 38,008 units sold during September 2019.

This trend is also corroborated through the volume growth in fertilisers and consumer non-durables.

“From a virtual zero level (in April), only few hundred passenger vehicles were produced and sold primarily to cater to exports of activity in the first month of this FY, moving to a double digit growth in September is a clear indication of pickup in economic activity even if one were to look at the September growth over a low base in the previous year,” said Sridhar V, Partner, Grant Thornton Bharat LLP.

“Fuel sales having reached pre-lockdown levels is also strengthening that view. While the reasons for growth vary from pent-up demand, new introductions, rural growth, good monsoon leading to positive outlook, and the onset of festive season are expected to keep the trajectory steady in the next month as well,” he added. (Read: MG Gloster launched at Rs 28.98 lakh)

In September, base effect along with a rebound in domestic demand led major automobile players to report healthy year-on-year and sequential sales numbers.

Analysts pointed out factors such as healthy monsoon, pent-up demand and preference for personal mobility over public transport due to the pandemic as the other key reasons for the upswing.

Last month, the Society of Indian Automobile Manufacturers’ data showed that a total of 2,15,916 passenger vehicles were sold in the domestic market, representing a rise of 14.16 per cent from the 1,89,129 units sold during the like period of 2019.

Similarly, the data showed a sequential growth in sales during August.


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Source: IANS

Deepika Chauhan

Hello, I am Deepika Chauhan an automobile enthusiast. Presently working as a Media Manager and Writer. My aim is to guide and teach ways to manage, grow and scale business.
Earlier, I have been a part of Asian News International (ANI) as a Sub-editor cum Producer.

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