The passenger vehicle segment, comprising cars, SUVs and vans, has seen a spike in booking cancellations with buyers unwilling to wait for extended periods to take delivery of their vehicles.
Shortage of semiconductors has pushed the waiting period to as much as 12 months for certain models that are in high demand. While the industry is able to supply 2,00,000-2,50,000 units a month, pending booking orders are more than double at around 5,50,000 units, as per estimates.
Vinkesh Gulati, President, Federation of Automobile Dealer Association, said, “Booking cancellations have trebled compared to the normal period. The cancellations are in the 40,000-45,000 range every month. During June, July and August, this was at 15,000-20,000 per month. Cancellations increased during the festival period because customers were keen to get delivery of the vehicle on a given date but failed to get it.”
Buyers flock to used cars
“The demand for used cars has seen a spike in the last few months which could be because of the long waiting periods in the new car market,” said Ashish Gupta, Brand Director, Volkswagen Passenger Cars India.
Though cancellations for new cars have spiked, steady bookings have made up for the loss. According to Gulati, the industry has been getting 5-10 per cent increase in bookings every month since the last four months. However, buyers have been resorting to multiple bookings for the same model, but at several dealerships. This leads to duplication in data aggregation.
“We are getting 2,00,000-2,50,000 bookings every month. We are retailing similar numbers and that is why the outstanding booking numbers are remaining unchanged,” Gulati added.
Consumer interest in new cars has remained high despite multiple price increases by auto makers since the start of FY22. Car makers have cashed-in on the healthy demand trend and have raised prices within one month of product launch.
Price of Mahindra Thar, for instance, has risen by ₹300,000 since its launch 14 months ago. From ₹9.8 lakh in October 2020, Thar’s base variant price has gone up to nearly ₹12.8 lakh.
Similarly, models that do not enjoy large volumes have seen nominal price increase. Tata Motors, for instance, has increased the price of the Safari by only ₹30,000 to ₹14.99 lakh since its launch in February.