Festive season fails to cheer up sales, automobile sector impacted in last two years due to lockdown, semi-conductor shortage

Lockdowns due to COVID-19 and semi-conductor shortage globally are the key reasons behind the drop in automobile sales in the last two years.

Automobile sales have been affected drastically in the last two years due to the lockdown that was imposed to contain the spread of the COVID-19 virus, said the Ministry of Heavy Industries in a written reply in Lok Sabha.

"Sales of automobiles have been affected in the last two years due to the spread of the COVID-19 virus in the country. Production and sales of automobiles have been impacted due to lockdown imposed to contain the spread of the infection," the ministry said.

The past two years have been affected a lot. If we compare the retail sales data of the Month of October 2019 with October 2021, according to Federation of Automobile Dealers Associations (FADA) sales data, retail sales of the automobile sector are down by (-) 26.64%.

Total 18.6 lakh units were sold in Oct 2019 and during Oct 2021 this number goes down to 13.6 lakh.

The two and three-wheeler segment was the most affected segment. Total 9,96,024 two-wheeler units were sold in October 2021 as against 14,23,668 two-wheeler units sold in October 2019 registering a de-growth of (-) 30.04 per cent. Total 39,077 three wheeler units were sold in Oct 2021 as compared to 63,040 units sold in October 2019, registering a de-growth of (-) 38.01 per cent. Total 2,28,431 units of passenger vehicles were sold in October 2021 as against 2,74,033 units sold in October 2019 registering a de-growth of (-) 16.64 per cent.

Total 56,732 units of Commercial Vehicles were sold during October 2021 as against 63,888 units sold in October 2019, registering a de-growth of (-) 11.20 per cent. Only tractor sales were seen in green. Total 44,262 tractor units were sold in October 2021 as against 35,469 sold in October 2019 registering a growth of 24.79 per cent. According to FADA, during the just concluded 42 days festive period, total vehicle retails were down by -18% Year on Year basis. Except for Three Wheeler and Commercial Vehicle, which were up by 53 per cent and 10 per cent, all the other categories were in red with 2 wheeler, Passenger Vehicle and Tractors down by -18 per cent, -26 per cent, and -23 per cent respectively.

Vinkesh Gulati, FADA President said, "We have witnessed the worst festive season in last decade. Semi-conductor shortage which was already a full-blown crisis showed its true colours when in spite of above healthy demand, we could not cater to customer's needs as SUV, Compact-SUV and luxury categories witnessed huge shortage of vehicles. On the other hand, entry-level cars saw subdued demand as customers in this category continued to conserve money due to their families healthcare needs."

The 2W 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. In fact, walk-in's and customer inquiries were also ultra-lean during the said period.

According to the Society of Indian Automobile Manufacturers (SIAM), October sales data Passenger Vehicles sales in October 2021 were down by (-) 27.15 per cent and Two-Wheelers were down by (-) 24.94 per cent compared to October 2020. Overall automobile sales in October 2021 is 1,799,750 as against 2,391,192 units sold in October 2020. Passenger cars have witnessed the sale of 112,112 units in October 2021 as against 114,390 units sold in October 2020. Passenger Vehicle (Including passenger cars, utility vehicles and Vans) has seen a sale of 226,353 units as against 310,694 units sold in October 2020.

Two-wheelers have seen a sale of 1,541,621 units as against 2,053,814 units sold in October 2020. Three-wheelers has witnessed growth in October sales. Total 31,774 three-wheelers were sold as against 26,684 units were sold in October 2020.

Rajesh Menon, Director General, SIAM said, "The Passenger Vehicles sales in October 2021 were down by (-) 27.15 per cent and Two-Wheelers were down by (-) 24.94 per cent compared to October 2020. Though the numbers of Three-Wheelers in October 2021 sold were more than the previous year, it is still less than half of what was sold in October 2019. Manufacturers were banking on the festive season to recover from the severe drop in sales they have faced in the early part of the financial year 2021-22. However, shortage of semiconductors and steep hike in raw material cost have been a major spoilsport for the Industry."

As per SIAM sales data total automobile industry has sold a total of 18 lakh units in October 2021 as against 23.91 lakh units sold in October 2020. The auto industry has witnessed 20.95 lakh sales of units.

( With inputs from ANI )

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