Automobile retail sales in the country witnessed a 5 per cent year-on-year drop last month amid a decline in two-wheeler and tractor dispatches during the period. As per automobile dealers’ body FADA, total retail sales last month stood at 12,96,257 units, down 5.27 per cent, from 13,68,307 units in September 2020.
While two-wheeler and tractor dispatches declined, other segments like passenger vehicles, commercial vehicles and three-wheelers saw an increase in retail sales last month, as compared to the same period a year ago. According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,357 out of the 1,562 regional transport offices (RTOs), two-wheeler sales stood at 9,14,621 units last month, down 11.54 per cent from 10,33,895 units in September 2020.
Similarly, tractor retail sales declined by 23.85 per cent to 52,896 units last month, as against 69,462 units in the year-ago period. PV sales on the other hand stood at 2,33,308 units in September, up 16.32 per cent from 2,00,576 units in the same month last year. Similarly, commercial vehicle retails increased by 46.64 per cent to 58,820 units, as compared to 40,112 units in September 2020. Three-wheeler sales increased by 50.9 per cent to 36,612 units last month, as against 24,262 units in the year-ago period.
“The two-wheeler category continues to play spoilsport as the entry level segment is yet to witness healthy growth. This segment’s performance is now becoming critical for the overall segment to come back on the path of recovery as dealer inventory has risen to 30-35 days in anticipation of a good festive season,” FADA President Vinkesh Gulati said in a statement.
Semiconductor shortage has also started impacting the over 150 cc segment, he added. On the PV segment, Gulati noted: “As we enter the core of this year’s festive season, the full blown semiconductor crisis continues to create hindrance in PV sales as vehicle inventory at dealers dip to record lows of 15-20 days during the current fiscal. With high demand in this segment, long waiting periods continue to frustrate and keep enthusiast buyers in a fix.”
The three-wheeler segment is now showing clear signs of tactical shift to EVs, he said. “With offices and educational institutions slowly opening up, electrification of three-wheelers will gather a greater momentum in months to come,” he added. The commercial vehicle segment is finally showing greater strength as all sub-categories continue to grow year-on-year, Gulati stated.
On business outlook, he noted: “With India entering the 42-day festive period beginning today, the near term outlook for this year’s festive season will be a mixed bag. While dealers have increased their inventory in the two wheeler category, PV inventory is at the lowest during this fiscal year due to the ongoing semiconductor crises.” The chip shortage looks less likely to ease within the next two quarters, Gulati said.
“As a result, PV sales are likely to stagnate going ahead even though OEMs are coming ahead with new launches to keep the customer excited,” he added. OEMs refers to original equipment manufacturers. However, skyrocketing fuel prices and a drop in purchasing power of entry-level customers in rural India are keeping themselves away from fulfilling their mobility needs, Gulati stated.
As per FADA, the total automobile retail sales during the April-September period this year rose by 35 per cent to 71,85,561 units as compared with year-ago period but remained 29 per cent less when compared to April-September period of 2019.