No festive cheer for auto makers this year

2-wheeler sales in India declined by 0.75%, from 14,44,762 units in November 2020 to 14,33,855 units last month. However, 4-wheeler sales dropped by 19.44%, from 2,98,213 units in November 2020 to 2,40,234 units in November 2021

New Delhi: Downward sentiments prevail for the auto industry as total vehicle retails for the month of November 2021 decreases by over two per cent.

According to the latest data released by Federation of Automobile Dealers Associations (FADA), in comparison to pre-Covid period of November 2019, the overall retails continue to fall by over 20 per cent.

FADA President, Vinkesh Gulati, on the recent performance of the auto industry, said, "Auto retail for the month of November continued to remain in negative zone despite Diwali as well as marriage season in the same month. The unwanted rains in southern states further spoiled the party. Unless rural India starts showing signs of strength, overall retails will continue to remain weak."

As per the association, two-wheeler sales in India declined by 0.75 per cent, from 14,44,762 units in November 2020 to 14,33,855 units last month. However, four-wheeler sales dropped by 19.44 per cent, from 2,98,213 units in November 2020 to 2,40,234 units in November 2021.

"Passenger vehicle segment continues to face the brunt of semi-conductor 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 interest in vehicle buying," Gulati said.

He added, "The commercial vehicle segment continues to see traction in M&HCV segment. This aided by low base 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 are not able to meet the demand. Tight liquidity and unavailability of finance for customers who availed moratorium are also acting as sales barrier."

FADA also expressed concern over new variant of Covid 'Omicron' in India which may impact the overall vehicle demand. On semiconductor chip shortage, the association has said that it is hopeful the crisis will ease in time to come and therefore reduce waiting period of vehicles and help in increasing sales.

On the two-wheeler, FADA has requested all Original Equipment Manufacturer (OEMs) to announce attractive scheme which can work as a stimulus for growth in sales and consistently work on a 21-days inventory cycle.