October retails for auto dealers fall 5% YoY; worst festive season in a decade: FADA

The Federation of Automobile Dealers Associations (FADA) on Thursday said the 2021 festive season was the worst for auto dealers in a decade, owing to the ongoing chip shortage crisis. The auto dealer association stated that on a year-on-year (YoY) basis, total vehicle retails for the month of October 2021, decreased by 5.33 per cent. It also added that overall retails continued to fall by 26.64 per cent when compared to pre-COVID-19 levels of October, 2019.

Commenting on how the October sales performed, FADA President, Vinkesh Gulati added, "Semi-conductor 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 customer’s need 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."

As per FADA, the two-wheeler sales were down 18 per cent, passenger vehicles by 26 per cent, and tractors by 23 per cent in the 42-day festive season.

It stated that three-wheeler sales were up 53 per cent and commercial vehicles by 10 per cent in the festive season. Buses as a category are yet to see any revival in demand. "With normalcy returning in business, the 3W category has started to witness usual demand."

The data also highlighted that the two-wheeler category continued 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," it added.

Further, in the commercial vehicle (CV) category, while entry-level and SCV’s have already grown post unlocking and due to intra-city goods movement, M&HCV showed strength due to low-base and infrastructure projects coming up in different states.