Automobile retail sales in India dropped 8 per cent on an annual basis in July on account of fall in registrations of passenger vehicles (PVs), two-wheelers and tractors.


As per data released by the automobile dealers' body FADA on Thursday, the overall automobile retail sales last month stood at 14,36,927 units, as compared with 15,59,106 units in July 2021.


Passenger vehicle retail sales witnessed a dip of 5 per cent at 2,50,972 units last month, as against 2,63,238 units in the year-ago period.


Federation of Automobile Dealers Associations (FADA) President Vinkesh Gulati noted that though there is a blip in July numbers, the segment continues to see introduction of new models, especially compact SUVs, aiding growth. "Along with this, a better supply in the coming months will help in bringing down customer anxiety due to the long waiting period," he added.


Similarly, two-wheeler retail sales stood at 10,09,574 units in July, down 11 per cent from 11,33,344 units in July 2021. "The two-wheeler retail run witnessed poor demand as rural India continues to underperform. This coupled with high inflation, erratic monsoon and high cost of ownership continues to keep bottom of the pyramid customers at bay," Gulati noted.


Tractor sales also remained in the slow lane at 59,573 units last month, down 28 per cent from 82,419 units in the year-ago period.


Three-wheeler and commercial vehicle sales, however, saw positive momentum last month with increase in sales as compared to July 2021.


Three-wheeler sales last month increased by 80 per cent to 50,349 units, as compared to 27,908 units in the year-ago period. Similarly, commercial vehicle sales witnessed an increase of 27 per cent at 66,459 units in July, as against 52,197 units in the same month last year.


"CV retail figures continue to witness good demand as the Government's infrastructure push is helping customers in concluding their purchases. Apart from this, the bus segment also witnessed the beginning of demand recovery as educational institutions and offices are once again back to normal mode," Gulati noted.


On outlook, he stated that the Taiwan-China conflict, if it happens, could lead to massive disruptions in the chip supplies.


"India's services sector PMI (purchasing manager's index) fell to a 4-month low in July to 55.5, showing that growth momentum lost steam as a result of weaker sales growth and inflationary pressure in the previous month. Overall, FADA remains cautiously optimistic due to the above factors as it enters the festival season," Gulati said.


FADA, which represents over 15,000 automobile dealers, said it collected data for July from 1,334 out of 1,409 RTOs across the country. 


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