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PV retail sales drop 19% in November, Omicron variant to impact vehicle demand: FADA – ET Auto

According to the dealers’ body report, total vehicle registrations at regional transport offices (RTOs), which are proxies for sales, dropped by 2.70% to 18,17,600 units over November last year.

New Delhi: Passenger vehicle registrations saw year-on-year degrowth of 19.44% to 2,40,234 units in November 2021 owing to the persisting semiconductor shortage, says the data shared by the Federation of Automobile Dealers Association (FADA) based on VAHAN.

Retail sales of two-wheelers fell 0.75% to 14,33,855 units, as against 14,44,762 units in November 2020.

According to the dealers’ body report, total vehicle registrations at regional transport offices (RTOs), which are proxies for sales, dropped by 2.70% to 18,17,600 units over November last year.

All segments were in red, except three-wheelers and commercial vehicles.

Vinkesh Gulati, president, FADA, said, “Auto retail in November continued to be negative despite Diwali and marriage season. The rains in southern states further spoiled the party. Until rural India starts showing signs of strength, overall retails will continue to remain weak.”

“While the 2W segment saw almost at par sales compared to last year (which itself was a bad year), overall sentiment remained low as marriage season also didn’t help in revival except in one or two states. Apart from this, crop loss due to incessant rains and flood in southern states, high acquisition price as well as fuel costs kept the customers away. Further, there are no signs of increase in inquiry levels which is a bigger cause of concern,” he said.

“PV continues to face the brunt of semiconductor shortage. While the new launches are keeping customer’s interest high, it is only the lack of supply which is not allowing sales to conclude. The extended waiting period is now starting to make customers jittery and this may lead to loss of interest in vehicle buying,” Gulati added.

PV retail sales drop 19% in November, Omicron variant to impact vehicle demand: FADA
Commercial vehicles saw an increase of 13.32% to 57,389 units in November 2021 as against 50,644 units in November 2020. While the LCV segment saw a YoY decline of 1.60%, MCV and HCV recorded a growth of 51.08% and 74.54% respectively.

According to the FADA President, the CV segment continues to see traction in the M & HCV segment. Aided by a low base this resulted in double digit growth. The bus segment is still witnessing a dry run as educational institutes continue to remain closed. With diesel prices at record highs, supply of CNG vehicles is not able to meet the demand. Tight liquidity and unavailability of finance for customers who availed moratorium are also acting as a sales barrier.

Retail sales growth was the highest for three-wheelers which reported 40,493 units in November this year, as compared to 24,269 units in the corresponding month last year.

Talking about the near term outlook, Gulati said that the new variant of Covid ‘Omicron’ has once again gripped the entire nation in fear, which will further impact the overall vehicle demand. Educational Institutions and offices which were planning to reopen fully have once again deferred their plans and are allowing work/study from home. Price rise due to high input costs and high fuel costs are continuing to add to customers’ woes.

“FADA is hopeful that the chip shortage will ease in a few months and therefore reduce the waiting period of vehicles and help in increasing sales. On the 2W front, we once again request all OEMs to announce attractive schemes which can work as a stimulus for growth in sales. FADA additionally requests them to consistently work on a 21- day inventory cycle,” he said.

The dealers’ body said it remains extremely cautious and hopes that India does not see a third wave with the new Covid variant. We also urge the Central as well as all State Governments to aggressively drive the vaccination coverage so that India is not caught off-guard and recovery to pre-covid levels is not derailed, Gulati said.

Also Read:

Passenger vehicle makers said they could not meet a strong consumer demand as a global shortage of semiconductors continued to impact production while two-wheeler makers blamed rise in acquisition costs after transition to Bharat Stage-VI emission standards along with economic impact of the second wave of Covid-19 in rural areas for a slump in sales.




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