Led by the low base in FY21, overall registration of automobiles in September declined only 5.27 per cent year-on-year, said Federation of Automobile Dealers Association (FADA). But when compared to September 2019, a regular pre- Covid month, registration fell by a sharp 13.5 per cent. The YoY decline during the month was largely due to an 11.5 per cent drop and 23 per cent drop in two-wheelers and tractor sales, respectively.
Albeit on a low base, the commercial vehicle sales showed the strongest YoY rebound advancing 46 per cent. It was led by a 189 per cent growth in the heavy commercial vehicles. In comparison to FY19, the CV retails in September were down only by a marginal 1.50 per cent. For the first time in the past 18 months, medium CV for the first time rose above pre-pandemic levels of 2019.
The auto dealers’ body has requested two wheeler makers to dole out special schemes to aid revival in the entry level two-wheeler (below 125 cc) segment as the segment is under severe pressure. This segment’s performance is now becoming critical for the overall two wheeler to come back on the path of recovery as dealer inventory rises to 30-35 days in anticipation of a good festive season. Semiconductor shortage has also started impacting the 150+ cc segment.
Meanwhile, the semiconductor shortage that worsened in the recent past continues to weigh on passenger vehicles. Dealers are not able to fulfill customer demand due to demand supply mismatch resulting in long waiting periods.
During the 1st half of this fiscal, while the overall retails were up by 35 per cent, it crimped 29 per cent when compared to 2019.
The three-wheeler segment, said FADA, is now showing clear signs of tactical shift from internal combustion engine-powered vehicles to electric vehicles. ICE to EVs as the ratio has hit a 60:40 split. With offices and educational institutions slowly opening up, electrification of three wheelers will gather a greater momentum in months to come, said FADA.
With India entering the 42 days festive period beginning today, the near term outlook for this year’s festive season will be a mixed bag. While two wheeler dealers have seen an increase in the inventory, PV inventory is at the lowest during this fiscal due to the ongoing semiconductor crises.
The chip shortage looks less likely to ease within the next two quarters. As a result, PV sales are likely to stagnate going ahead. This is despite a slew of new launches. A skyrocketing fuel prices and a drop in purchasing power are going to be another deterrent as entry level customers in rural India are keeping themselves away from fulfilling their mobility needs.
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