The Federation of Automobile Dealers Associations (FADA) has released the monthly retail data for November 2021. Last month, India's overall auto sales stood at 18,17,600 units, a marginal 2.7 per cent decline compared to 18,68,068 vehicles retailed a year ago in November 2020. However, compared to 13,64,526 units sold in October 2021, the industry saw a 37 per cent month-on-month (MoM) growth. At the same time, in November 2021, the passenger vehicle segment saw 2,40,234 new registrations, a nearly 20 per cent decline compared to 2,98,213 units retailed during the same month in 2020. However, compared to 2,28,431 units sold in October 2021, the segment saw a MoM growth of 5 per cent.
FADA President, Vinkesh Gulati said, "PV continues to face the brunt of semi-conductor shortage. While the new launches are keeping customers' 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 of interest in vehicle buying."
FADA says that auto retail for November continued to remain in the negative zone despite Diwali and marriage season falling on the same month. The unexpected rains in southern states further added to the problem. carandbike reached out to Maruti Suzuki India, the country's largest carmaker, for a comment on PV retail performance, however, at the moment, a response is awaited from the company.
Also Read: Car Sales November 2021: Maruti Suzuki Sees 9% Decline In Sales, But Reports Highest Monthly Exports
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In November 2021, total two-wheeler retail sales remained flat at 14,33,855 units, compared to 14,44,762 units sold during the same month last year. However, against the 9,96,024 vehicles sold in October 2021, the segment witnessed MoM growth of nearly 44 per cent. Despite that, FADA says that overall sentiment remained low as marriage season also didn't help in revival except in one or two states.
Also Read: Two-Wheeler Sales November 2021: Bajaj Domestic Sales Decline 23 Per Cent
Commenting on the industry's performance, Nikunj Sanghi, owner of J.S. Fourwheel Motors, a dealer partner of Mahindra and Hero MotoCorp, said, "Two-wheeler sales was definitely nowhere near expectation, and the passenger vehicle (segment) a lot of it is disguised because of poor availability. How the festival season and the marriage season have performed would have been far clearer if the supplies were much better. Because of the waiting list and because people are not getting their vehicle, it's difficult to say how the passenger vehicle industry would have performed had the supplies been absolutely normal and sufficient numbers were available."
Experts believe, the long waiting period due to semiconductor shortage is affecting demand for passenger vehicles
However, Sanghi said he was happy that the retail sales were much better than wholesale numnbers, and this indicates that there have been inventory corrections, which is always good for the industry. He further added that inventory corrections have been very good specifically in the two-wheeler space.
Commenting on the expectation from the market Sanghi added, "Going ahead, I think the situation will continue to stress, specifically two-wheelers because we are not seeing any demand indications... even in the passenger vehicle segment, if the semiconductor issue does improve, there will be some flattening of demand."
Also Read: CV Sales November 2021: Ashok Leyland's Volumes Drop 5.4% Against October; YoY Sales Drop 2%
FADA's report shows the growth in the three-wheeler and commercial vehicle sales was the silver lining for dealers, which was otherwise mostly a distressing situation. Three-wheeler sales in November 2021 stood at 40,493 units, a massive growth of 67 per cent compared to 24,269 units sold during the same month in 2020. On the other hand, CV sales for last month stood at 57,389 units, about 13 per cent growth as against 50,644 units sold in November 2020.
Commercial Vehicles sales for last month stood at 57,389 units, about 13 per cent growth as against 50,644 units sold in November 2020
Sharing his views on the November retail performance, Sridhar V, Partner, Grant Thornton Bharat LLP. said, "Waiting period because of chip shortage and unusually heavy rains in some parts of the country has been a great dampener for sales and registration both in the 2W and PV segment in November 2021. Larger OEMs, especially have borne the brunt of chip shortage, which is expected to take some more time to settle down. Year-end inventory disposal and the pending price increase come the New Year could trigger a slight upward momentum in December 2021 hopefully."
On the other hand, auto industry expert Avik Chattopadhyay said, "The percentage of neutral and negative sentiments shared in the FADA report are of serious concern for all - the policymakers, the automakers, and the network partners. The last time the automobile market experienced overall positive sentiment was in September 2018. Since then, the slackening pace of economic growth, reduction in employment opportunities and the Covid pandemic have worked together in building the current state of mind. We will not come out of this soon enough and the solutions lie beyond the control of the automakers and their network partners."
FADA is hopeful that the chip shortage will ease in times to come and therefore reduce the waiting period of vehicles and help in increasing sales.
