Indian Auto has had the worst decade in festivals; Sales impacted by chip crisis:

Indian Auto has had the worst decade in festivals; Sales impacted by chip crisis:

FADA said on Thursday that automobile retail sales in the country declined by 18 per cent year-on-year during the 42-day festive period this year as semiconductor shortages hit companies’ production, leaving dealer partners Their ability to supply adequate numbers has been affected.

During the period under review, except three wheelers and commercial vehicles, all other segments including passenger vehicles, two wheelers and tractors were down as compared to the same period last year.


According to data compiled by Federation of Automobile Dealers Associations (FADA), total retail sales across segments stood at 20,90,893 units during this festive period, down 18 per cent from 25,56,335 units in 2020.

Passenger vehicle registration stood at 3,24,542 units, down 26 per cent from 4,39,564 units in the festive period last year.

Similarly, two-wheeler sales declined by 18 per cent to 15,79,642 units this year from 19,38,066 units in 2020.

Tractor sales declined by 23 per cent to 56,841 units as against 73,925 units in the same period last year.

However, sales of three wheelers increased by 53 per cent to 52,802 units as against 34,419 units last year. Similarly, sales of commercial vehicles increased by 10 per cent to 77,066 units as against 70,361 units in 2020.

“We have witnessed the worst festive season in the last decade. Semiconductor shortage which was already an absolute crisis showed its true colors when, despite the above healthy demand, we are looking forward to the customers in the form of SUVs, compact-SUVs and luxuries. FADA President Vinkesh Gulati said the categories witnessed a severe shortage of vehicles.

On the other hand, demand for entry-level cars saw a dip as customers in this category continued to save money to meet healthcare needs and other expenses, he said.

“The two-wheeler segment is bearing the brunt of lower sales, with the entry-level category being the biggest spoilsport. Rural distress in retail, frequent price hikes, triple digit fuel prices and money-saving for health emergencies Customers doing this have kept the demand low, Gulati said.

In fact, customer inquiries were also ultra-lean during the period under review, he said.

Gulati said that the M&HCV segment in the CV space is now in recovery mode and infrastructure projects are coming up in various states.

However, the buses are running at a slow pace as there is no improvement in demand, he said.

Gulati said that with the situation normalizing in various states, the three wheeler segment has started seeing normal demand.

“It is worth mentioning that we are witnessing a strategic shift from ICE (internal combustion engine) to electric. Electric vehicle (EV) share in this segment has now crossed 45 per cent mark,” he added.

In October, overall retail sales declined by 5 per cent year-on-year to 13,64,526 units.

According to FADA, which collected vehicle registration data from 1,357 out of 1,570 Regional Transport Offices (RTOs), passenger vehicle registrations declined by 11 per cent to 2,28,431 as compared to 2,57,756 units in October 2020.

Similarly, two-wheeler sales declined by 6 per cent to 9,96,024 units as against 10,60,337 units in the same month last year.

Compared to October 2020, sales of three wheelers grew by 74 per cent year-on-year, while that of tractors registered a decline of 21 per cent.

FADA said that even though the festive period is now over, there is still a huge backlog of orders in the PV segment.

“If PV original equipment manufacturers (OEMs) are able to reconcile supply with demand, we could still see a good year-end retail,” it said.

The dealer’s body also urged two-wheeler companies to rationalize inventory.

It also requested the companies to introduce attractive schemes for the customers so as to revive the demand especially in the entry level category.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is generated automatically from a syndicated feed.)

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