India July car, tractor sales race past pre-Covid levels, two-wheelers lag

India’s automobile sales staged a smart recovery in July, thanks to Covid-19 unlock measures by state governments and a low base effect.

Total vehicle sales jumped 34% to 1.55 million units for July 2021 from 1.16 million units a year earlier, as per data released by the industry body Federation of Automobile Dealers Associations (FADA).

However, sales were still 13% lower than the 1.79 million units sold in July 2019, before the onset of the pandemic. 

On the plus side, sales of tractors and passenger vehicles have risen above pre-Covid levels. Tractor sales in July 2021 were 48% higher from the level two years ago while passenger vehicles, which include cars and sport-utility vehicles, grew 24%. Two-wheeler sales remained below the levels seen in July 2019.

“With entire country now open, July continues to see robust recovery in auto retails as demand across all categories remains high. The low base effect also continues to play its part. Auto retails have now started narrowing the deficit when compared to pre-Covid months,” said FADA president Vinkesh Gulati.
The medium- and heavy commercial vehicles segment recorded the highest year-on-year increase in sales on expectations the launch of various infrastructure projects may push demand for buses and trucks higher.
Other highlights for July

    1. Sales of heavy commercial vehicles such as trucks and buses surged nine-and-a-half times to 11,307 units.
    2. Sales of medium commercial vehicles jumped almost eight times to 2,888 units.
    3. Tractor sales inched up 6.64% from a year earlier to 82,388 units. 
    4. Passenger vehicle inventory was 30-35 days at the end of July while two-wheeler inventory was 20-25 days.

Outlook

FADA said prediction of a normal monsoon during August and September may boost sowing. This, in turn, may have a rub-off effect on rural sales, especially the tractor segment.
However, it warned that the highly contagious Delta variant of the coronavirus and a possibility of the third wave remain a threat and may disrupt the sales volume in coming months.
Global semiconductor shortage is also turning into a deep-routed problem for the passenger vehicle segment, FADA said.