BENGALURU (Reuters) – Retail sales of cars and bikes in India rose in June, an industry body said on Thursday, while also flagging “demand-supply mismatches” that likely caused some disruption.
Sales of cars and vans – clubbed as passenger vehicles – rose 4.8% to more than 295,000 units – a record high for the month of June, while those of two wheelers were up 6.8% at over 1.3 million units, data from the Federation of Automobile Dealers Association (FADA) showed.
However, dealers selling cars have been impacted by a rise in inventory of some slow-moving cars and have noted “sporadic supplies of popular models,” FADA President Manish Raj Singhania said in a statement.
Retail sales could have been slightly higher if not for the limited supply of utility vehicles, said Himanshu Singh, Research Analyst at Prabhudas Lillader, adding that a component issue at Mahindra and Mahindra and a planned shutdown at Maruti Suzuki India curbed some volumes.
Retail PV sales were up 4.3% in May after a 1.4% fall in April, while wholesale numbers for May and April were up 13.5% and 12.9% respectively, pointing to an inventory buildup.
Dealers have been grappling with a rise in inventory of slow-moving entry-level cars in the past 3 months, as supply of the more popular utility vehicles have been limited by chip shortages.
Though overall sales numbers were up in June, Singhania said retail volumes for two wheelers were hurt by supply constraints from some manufacturers.
“New model introductions, festive promotions and seasonal factors couldn’t markedly boost sales,” FADA said.
The industry body also warned that erratic monsoon rainfall in the country could affect sales of entry-level cars and two-wheelers in rural India as a weak agricultural season could lead to reduction in disposable income.
(Reporting by Nandan Mandayam in Bengaluru; Editing by Nivedita Bhattacharjee)
