The Federation of Automobile Dealers Associations (FADA) today released vehicle sales data today, revealing that the numbers are looking better than August 2020, however, compared to August 2019 (which was before the pandemic) sales numbers are still down by 14.75 percent. On a year-on-year basis though, all categories were in the green with total vehicle sales rise by 14.48 percent compared to August 2020. Furthermore, FADA warns that the upcoming festive season could be marred by the unavailability of variants and schemes or discounts.
FADA first raised demand-supply mismatch in January 2021 due to a shortage of semi-conductors in few brands. The federation also warns of a lackluster festive season especially for PV dealers as inventory level continues to dip due to the non-availability of the fast-moving variants.
With OEMs drastically cutting down productions due to unavailability of semi-conductors and ABS chips, shortage of containers and high metal prices, customers for the first time may not get a vehicle of their choice and lucrative schemes during this festive season. The ultra-frequent price increase is also keeping entry-level buyers at bay.
Customers especially at the bottom of the pyramid are shifting their priority from saving instead of spending. This will keep demand for two-wheelers a concern. Though, with educational institutions slowly opening up, a ray of hope can be seen for improved demand in the two-wheeler category in the coming months.
FADA thus sees that the near-term outlook will continue to remain a mixed bag with PVs witnessing demand-supply mismatch and two-wheelers facing a demand crunch.
“Auto Dealers are facing the most challenging phase of their business career as Covid-19 after-effect continues to play spoil-sport. While until last year, when demand was a challenge, supply is becoming a bigger problem currently due to shortage of semi-conductors, even though there is high demand for passenger vehicles,” FADA President Vinkesh Gulati said.
“Every dealer by now starts planning for a bigger offtake in anticipation of a bumper festive but due to supply issues, inventory levels are at lowest levels during this Financial Year.”
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