Vehicle sales fell significantly in October, worst festive season of decade: FADA

Owing to the semiconductor shortage, October 2021 was the worst in a decade in terms of auto sales, the Federation of Automobile Dealers Associations (FADA) has said.

The total vehicle sales in October stood at 13,64,526 units, down 5.33 per cent year-on-year. In October 2020, this figure was 14,41,299. At the same time, if compared with October 2019, there has been a significant decline of 26.64 per cent in the total sales of vehicles. FADA released the data on retail sales of vehicles on Thursday.

The association says that there is demand in the market, but there is no supply. If the auto manufacturers bump up supplies, it could still be a better year in terms of retail sales.

Speaking about the retail sales of October 2021 and the festive season, Vinkesh Gulati, President of FADA, says that the last decade has been the worst festive season. Semiconductor shortage happened at a time when healthy demand was returning. We could not meet the requirements of the customers as there was a huge shortage of vehicles in the SUV, Compact-SUV and Luxury categories.

According to FADA data, the sales in the two-wheeler category are also disappointing. The entry-level category suffered the most. Demand remained low due to an increase in the prices of vehicles, the price of petrol crossing Rs 100 a litre and consumers spending for emergency health needs. Two-wheeler sales declined 6.07 per cent year-on-year to 9,96,024 in October. It was 10,60,337 in October 2020. On the other hand, if we look at the two-wheeler sales as compared to October 2019, it declined by 30.04 per cent.

According to FADA, sales of three-wheelers (3W) and commercial vehicles (CV) have, however, increased in October 2021. Year-on-year sales of 3W increased by 73.93 per cent to 39,077 in October from 22,467 in October 2020. However, 3W sales declined by 38.01 per cent as compared to October 2019. Talking about CV, it increased by 26.45 per cent to 56,732 in October this year, against 44,865 in October 2020. However, sales of commercial vehicles declined by 11.20 per cent as compared to October 2019. In fact, October 2019 was a regular pre-COVID-19 month, as the entire industry was under pressure due to the pandemic last year.

FADA says that auto sales may have been weak in the festive season, however, there is a huge backlog in the passenger vehicle segment. If automobile manufacturers start supplying according to the demand, it can still prove to be a good year in terms of retail. FADA also appeals to auto manufacturers to reduce inventory. Dealers say that companies should come up with attractive schemes to boost demand at the entry level.

Source : DNA India