NEW DELHI: Hit hard by semiconductor shortage crisis that has severely brought down production at almost all major auto companies, retail auto sales during this year’s recently concluded festive season was lowest in 10 years.
According to the Federation of Automobile Dealers Associations (FADA), total retail sales across segments in the 42-day long festive period stood at 20,90,893 units this festive period, down 18% from 25,56,335 units in 2020.
“We have witnessed the worst festive season in the last decade. Semiconductor shortage which was already a full blown crisis showed its true colours when in spite of an above healthy demand, we could not cater to customers’ need as SUV, compact-SUV and luxury categories witnessed huge shortage of vehicles,” said FADA President Vinkesh Gulati.
He added that entry-level cars saw subdued demand as customers in this category continued to conserve money to take care of healthcare needs and other expenses.
Besides the semiconductor shortage, market experts and industry executives had cited rising raw material prices as a major factor that has forced automakers to hike prices of vehicles by 3-4 times this calendar year and a record rise in fuel prices that have negatively impacted two-wheelers and entry-level passenger car sales. Gulati said, “The two-wheeler category continues to face the brunt of low sales with the entry-level category being the biggest spoilsport. The rural distress in retails coupled with frequent price hikes, triple digit fuel prices and customers conserving funds for healthcare emergencies kept the demand low.”
During the period, except for 3-wheeler and CVs, all other segments including passenger vehicles, two-wheelers and tractors were down as compared with the same period of last year.
According to industry sources, chip crisis has started to ease and by the end of FY22, they might witness normalcy in production.
