With Consistent Long Waiting Periods Passenger Vehicles Customers Bear The Brunt Of Chip Shortage – FADA

The Federation of Automobile Dealers Associations (FADA) released Vehicle Retail Data for December’21 stating that on YoY basis, total vehicle retails for the month of December’21 went down by -16%. When compared to December’19 (a regular pre-covid month), overall retails continue to fall by -6%. Segment wise breakup shows 3W and CV were up by 59% and 14% while 2W, PV and Tractors fell by -20%, -11% and -10% respectively when compared to the previous year. 

FADA also noted that the passenger vehicles segment bore the brunt of the Semiconductor shortage with consistent long waiting periods for the new car deliveries. Meanwhile the 2-wheeler segment has shown no sign of recovery in retail sales as customers remain cautious with rising 3rd wave sentiment.

Commenting on how December’21 performed, FADA President, Vinkesh Gulati said, “The month of December is usually seen as a high sales month where OEMs continue to offer best discounts to clear the inventory due to change of year. It was however not the case this time around as retail sales continued to disappoint thus wrapping up an underperforming calendar year.

CV segment continues to rise with M&HCV outshining LCV’s. The government’s push for infrastructure spending especially Road infrastructure, better freight rates, price hike announcement in Jan and a low base helped the overall segment close in positive double digits.”

FADA remained cautious in it outlook for the new term, stating “Various state governments have once again announced covid restrictions. Work and education from home have resumed and will have a negative effect for auto retail. With the fear of health care expenses rising again, the customers are shying away from closing their purchase decisions. 

With IIT Kanpur predicting the peak of omicron sometimes in 1st week of February, FADA hence remains extremely cautious over the next 2-3 months.”

All India Vehicle Retail Data for December’21