FADA: As supply problems continue, car sales are declining month by month

Staff Writer

The Indian automotive industry is facing the impact of the COVID-19 pandemic. In August, overall retail sales were 13,84,711 units (a year-on-year increase of 14.48%), compared with 15,56,777 units a month ago.

  • Semiconductor shortage continues to cause supply problems
  • Dealer inventory levels are at the lowest level for the current fiscal year

FADA President Vinkesh Gulati said: “As the sequelae of COVID-19 continue to play a destructive role, car dealers are facing the most challenging stage of their business career. Until last year, demand was a challenge. But now, despite the increase in demand , But due to the shortage of semiconductors, supply is becoming a bigger problem. Now, every distributor is planning to carry out larger sales in order to usher in the harvest festival. However, due to supply problems, inventory levels are at the lowest level this fiscal year. “

“The two-wheeler market is highly price sensitive. With multiple price increases, fuel costs, and the closure of educational institutions, the overall market segment may be affected. Due to COVID-19-related health issues, customers continue to struggle with financial wars, As a result, staying away from dealers led to low inquiries and reduced sales. This has had an impact on the entry-level segment, which continues to face the biggest impact,” Gulati added.

Supply and demand mismatch will continue

The person in charge of FADA expects that the near-term prospects will remain mixed, with a mismatch in the supply and demand of passenger cars and demand tightening for two-wheelers.

He said that due to insufficient supply of semiconductors and ABS chips, OEM manufacturers have cut production significantly, coupled with shortages of containers and high metal prices, “customers may not be able to get the vehicles of their choice and lucrative plans for the first time. Holiday.” In addition, “Overclocking price increases” also discourage entry-level buyers.

Gulati said that customers, especially those at the bottom of the pyramid, are changing their priorities and are saving rather than consuming. This is a worrying issue, and it affects the demand for two-wheelers. However, with the slow opening of educational institutions, as demand may increase, the light of hope for two-wheelers in the coming months.

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