With original equipment manufacturers (OEMs) drastically cutting down production due to non-availability of semi-conductors, shortage of containers and high metal prices, customers, for the first time, may not get a vehicle of their choice and lucrative offers this festival season.

Frequent price increase is also keeping entry level buyers at bay, the Federation of Automobile Dealers Association (FADA) said on Tuesday. “Auto dealers are facing the most challenging phase of their business career as Covid-19 after-effect continues to play spoilsport. While until last year demand was a challenge, supply is becoming a bigger problem currently due to shortage of semi-conductors, even though there is high demand for passenger vehicles (PVs),” Vinkesh Gulati, President, FADA, said.

In its monthly data, FADA said passenger vehicle retail sales in August declined by more than three per cent to 2,53,363 units compared with 2,61,744 units in July.

Two-wheeler sales declined 14 per cent month-on-month (MoM) to 9,76,051 units (from 11,32,611 units).

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Two-wheeler segment

Customers, specially at the bottom of the pyramid, are shifting their priority to saving instead of spending. Hence demand for two-wheelers will be a concern. But, with educational institutions slowly opening up, a ray of hope can be seen for an improved demand in the category in the coming months, FADA said.

However, commercial vehicles (CV) and three-wheeler retail sales grew on the monthly basis.

While CV sales grew at 53,150 units in August compared to 52,130 units in July, three-wheeler sales rose to 30,410 units against 27,904 units in the previous month.

Tractor sales declined 13 per cent to 71,737 units (82,388 units).

According to FADA, average inventory at the end of July for PVs stood at 25-30 days, while in the two-wheeler space it ranged between 20 and 25 days.

 

 

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