High inflationary pressure across sectors will have a negative effect on entry level passenger vehicles (PVs) and two-wheeler (2W) segment which are generally dominated by first-time buyers, said Federation of Automobile Dealers Association (FADA) on Tuesday.

"The Russia–Ukraine crises has increased inflationary pressure world over. RBI Governor during the recent Monetary Policy meeting has also flagged high inflation as a major cause of concern. In the past few months, prices of almost all essential items have moved northwards, thereby putting pressure on the common man’s household budget and reducing his disposable income. Additionally, the high fuel prices have had a spill over effect on transportation and made it expensive," Vinkesh Gulati, President, FADA said in monthly retail sales report.

Gulati said the ease in availability of semi-conductors will see increased supply, especially in PV segment, thereby reducing the waiting period. If rural India stabilises, auto retail will enter festive season on a good note.

Jump in June sales

On monthly retail sales, the industry body said PV sales grew by over 40 per cent year-on-year (YoY) to 2,60,683 units in June compared with 1,85,998 units in the corresponding month last year.

Similarly, 2W sales grew by more than 20 per cent to 11,19,096 units during the month against 9,30,825 units in June last year.

Three-wheeler (3W) sales grew multifold to 46,040 units in June compared with 14,735 units in June 2021.

Commercial vehicle (CV) sales recorded a growth of 89 per cent to 67,696 units last month compared with 35,810 units in same month a year ago.

The retail sales of tractor grew by 10 per cent to 57,340 units in June as against 52,289 units in June 2021.

"Auto retail for the month of June continued to show its positive run when compared YoY with June 2021, a month which continued to face the brunt of Covid. Apart from PV and tractors which were already above pre-Covid level for the last few months, CV for the first time showed a growth, thus indicating recovery slowly creeping in for this segment," Gulati added.

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