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With IIT-Kanpur predicting the peak of Omicron sometime in the first week of February, auto retailers on Wednesday said they remain extremely cautious for the next two-three months.
“Various State governments have once again announced Covid restrictions. Work and education from home have resumed and will have a negative effect for auto retail. With the fear of health care expenses rising again, the customers are shying away from closing their purchase decisions,” Vinkesh Gulati, President, Federation of Automobile Dealers Associations (FADA), said in the monthly retail sales report.
According to report, passenger vehicle (PV) retail sales declined by 11 per cent year-on-year (YoY) to 2,44,639 units in December 2021 compared with 2,74,605 units in December 2020.
Monthly sales
“The month of December is usually seen as a high sales month where original equipment manufacturers (OEMs) continue to offer best discounts to clear the inventory due to change of year. It was however not the case this time around as retail sales continued to disappoint thus wrapping up an underperforming calendar year,” Gulati said.
With semi-conductor shortage continuing to play spoil-sport, PV sales, in spite of huge bookings, in December closed in the red. Dealers, however, saw slight ease in vehicle supply thus giving some hope for improvement, Gulati said.
Read more: EV sales double in 2021, cross 3 lakh-mark
The two-wheeler (2W) sales also declined by 20 per cent YoY to 11,48,732 units during the month as against 14,33,334 units during the same period in 2020.
High cost of ownership, bad rural sentiment, work from home and the latest threat of Omicron continued to impact sales, FADA said.
However, the commercial vehicle (CV) segment continues to rise with medium, and heavy commercial vehicles (M&HCV) outshining light commercial vehicles.
The government’s push for infrastructure spending, especially road infrastructure, better freight rates, price hike announcement in January and a low base helped the overall segment close in positive double digits,” Gulati added.
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