Car and tractor sales had been good in November last year, giving a high base for comparison this year. The two segments recorded 19% and 9% year-on-year declines in registrations last month.
Two-wheelers, which account for over three-quarters of the vehicles sold in India, just managed to match last year’s sales. However, the base was low compared to preceding years.
Commercial vehicles (CV) and three-wheelers logged growth in registrations in November at 13% and 67% on-year, but this again was on a significantly low base due to tepid sales last year on account of Covid-19.
The data were put together by the Federations of Automobile Dealers’ Associations (FADA) from the road transport and highways ministry’s Vahan dashboard. A tenth of the regional transport offices (RTO) in the country are yet to migrate to the online platform so the data are incomplete. But they paint an accurate picture in terms of trends.
“PV (segment) continues to face the brunt of semi-conductor shortage,” FADA president Vinkesh Gulati said. PV stands for passenger vehicles, or cars.
The semiconductor shortage meant that customers have to wait for several weeks for their new car. The wait period can get as long as a year in extreme cases. Dealers are running on a low inventory of PVs at just 10-15 days on average, compared to the industry norm of holding at least a month of stock.
“While the new launches are keeping customer’s interest high, it is the lack of supply which is not allowing sales to conclude,” Gulati said.
While supply is the missing piece of the puzzle for the PV segment, it is demand for the rest of the market. Two-wheeler sales have been low for several months now owing to tepid rural demand, many education institutes and offices sticking to remote work, sharp price hikes over the last couple of years and triple-digit fuel prices. This has been especially pronounced in the entry-level two-wheeler market.
Two-wheeler dealers hold about 30-35 days of inventory, slightly higher than the industry norm.
“Further, there are no signs of increase in inquiry levels which is a bigger cause of concern,” the FADA president said.
The CV segment is making a slow recovery after a protracted slowdown that started even before the Covid-19 pandemic and got only worse since. The three-wheeler segment is making a similar recovery led by sales of electric three-wheelers.