Auto sales in India drop 5.27% in September due to shortage of chips

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The Federation of Automobile Dealers (FADA) said the chip shortage seemed less likely to abate over the next two quarters and therefore passenger vehicle sales are expected to stagnate in the future.

Overall retail sales of vehicles in India on a sequential as well as year-on-year basis in September 2021 were affected due to lower production due to semiconductor supply shortages and a period of downturn. ‘longer wait. Data released by the Federation of Automobile Dealers Associations (FADA) on Thursday, October 7 shows a drop of 5.27% in September 2021 compared to the same period last year. Retail vehicle sales fell to 12,96,257 units last month, from 13,68,307 units sold in the corresponding month of 2020.

Likewise, the overall retail sales figure for last month, compared to the period of September 2019 (before the pandemic), showed a drop of 13.50%. In September 2019, total retail vehicle sales were 14,985,585 units. In terms of segment, retail sales of passenger vehicles (PV) increased 16.32% in the month under review compared to the level of September 2020. Retail sales of PV reached 233,308 units in the month last, compared to 200,576 units sold in September 2020.

“As we enter the height of the holiday season this year, the real semiconductor crisis continues to hamper sales of photovoltaic panels as vehicle inventories at dealerships end up falling to a record low of 15 to 20 days during the current fiscal year. With high demand in this segment, the long waiting period continues to frustrate and keep enthusiastic buyers in trouble, ”said FADA President Vinkesh Gulati.

FADA said the two-wheeler (2W) category continues to be a spoiler as the entry-level segment has yet to experience healthy growth. “The performance of this segment is now becoming critical for the entire 2W to get back on track for recovery as dealer inventory stands at 30-35 days in anticipation of a good holiday season. The semiconductor shortage has also started to impact the 150+ cc segment, ”Gulati added.

The three-wheeler (3W) segment is now showing clear signs of a tactical shift from ICE (internal combustion engine) to electric vehicles (electric vehicles), as the ratio has reached a 60:40 split. With the slow opening of offices and educational establishments, the electrification of 3W will gain greater momentum in the coming months, FADA said.

FADA said with India entering the 42-day holiday season starting today, the near-term outlook for this year’s holiday season will be mixed. While resellers have increased their inventory in the 2W category, PV inventory is at an all-time low this fiscal year due to the current semiconductor crisis.

FADA said the chip shortage appears less likely to ease over the next two quarters. As a result, PV sales are likely to stagnate in the future, even as original equipment manufacturers (OEMs) launch new launches to keep the customer excited. “With soaring fuel prices and declining purchasing power, entry-level customers in rural India are shying away from their mobility needs,” FADA noted.

Emphasizing that India’s vaccination campaign has achieved remarkable momentum, the dealers association said, “This, coupled with a lower likelihood of a third wave in the near future and the gradual opening of offices and educational institutions, we are planning a marginal recovery process to start in the 2W space. FADA has asked all 2W OEMs to roll out special promotion programs so that they can launch 2W retail sales for faster recovery.


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