As India gets back on its feet post third wave of Covid, the Federation of Automobile Dealers Associations (FADA) on Monday said it expects auto retail sales will slowly turn positive.

Semi-conductor shortage is also showing signs of easing as many passenger vehicle (PV) manufacturers assures better dispatch, it said.

"We hence expect vehicle availability to improve further. Overall, FADA changes its outlook from ‘negative – neutral’ to ‘neutral’ for the next couple of months," Vinkesh Gulati, President, FADA, said.

Retail sales

In terms of monthly retail sales, January continued to show weak performance as overall retails on year-on-year (YoY) basis, fell by around 11 per cent.

The latest FADA report said that PV retail sales declined by 10 per cent YoY to 2,58,329 units in January as against 2,87,424 units in corresponding month last year.

Two-wheeler sales also declined by more than 13 per cent to 10,17,785 units during the month as against 11,75,832 units in January 2021.

Tractor sales declined by 10 per cent to 55,421 units in January as compared with 61,485 units in same month last year.

Three-wheeler sales up

However, three-wheeler sales grew by 30 per cent to 40,449 units during the month as compared with 31,162 units in January last year.

Commercial vehicles sales also grew by more than 20 per cent 67,763 units as compared with 56,227 units in January 2021.

"In spite of good demand, PV continues to face the brunt of semi-conductor shortage resulting in void of a healthy inventory. In the two-wheeler category, the rural distress coupled with price rise and omicron wave played a villain’s role for this segment," Gulati added.

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