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The near-term outlook for this year’s festival season will be a mixed bag, according to the Federation of Automobile Dealers Associations (FADA).
While dealers have increased their inventory in two-wheeler (2W) category, passenger vehicle (PV) inventory is at the lowest during the financial year due to the semi-conductor crisis, it added.
“As we enter the core of this year’s festival season, the full-blown semiconductor crisis continues to create hindrance in PV sales as vehicle inventory at dealers end dip to record lows of 15-20 days during the current fiscal. With high demand in this segment, long waiting period continues to frustrate and keep enthusiast buyers in a fix,” Vinkesh Gulati, President, FADA, said.
The chip shortage looks less likely to ease within the next two quarters. As a result, PV sales are likely to stagnate even though manufacturers are coming up with new launches to keep the customer excited, he said while sharing the monthly retail sales data for September.
High fuel price
“With skyrocketing fuel prices and a drop in purchasing power, entry level customers in rural India are keeping themselves away from fulfilling their mobility needs,” he added.
As per its monthly report, total retail sales in September stood at 12,96,257 units, down five per cent year-on-year (YoY) from 13,68,307 units in the corresponding month last year.
However, segment wise, PV sales grew by more than 16 per cent on YoY basis at 2,33,308 units last month as against 2,00,576 units in September 2020. Similarly, commercial vehicle retails increased by around 47 per cent to 58,820 units in September, compared to 40,112 units in same month last year.
Entry-level
FADA, which collects vehicle registration data from 1,357 out of the 1,562 regional transport offices (RTOs), said the 2W category continues to play spoilsport as entry level segment is yet to witness healthy growth. This segment’s performance is now becoming critical for the overall 2W to come back on the path of recovery as dealer inventory rises to 30-35 days in anticipation of a good festival season.
Semiconductor shortage has also started impacting the 150+ cc segment, the industry body said. Two-wheeler sales during last month stood at 9,14,621 units, down by more than 11 per cent from 10,33,895 units in September 2020.
The 3W segment is showing clear signs of tactical shift from internal combustion engine (ICE) to electric vehicles (EVs) as the ratio has hit a 60:40 split, FADA said. With offices and educational institutions slowly opening up, electrification of 3Ws will gather greater momentum in the months to come, it added.
Similarly, tractor retail sales declined by 24 per cent to 52,896 units last month, as against 69,462 units in the corresponding month last year.
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