The consortium of automobile dealers associations said record high fuel price increases would negatively impact two-wheeler and commercial vehicle sales.
By the time February saw double-digit growth in domestic retail sales of passenger vehicles, nearly half of automobile dealers lost business due to unavailability of vehicles as global semiconductor shortages continued to affect production, with automobile dealer associations ( Fed) said on Tuesday.
Noting that the new wave of COVID-19 in some states and high fuel prices affected consumer sentiment, giving a tough competition to the two-wheeler segment, FADA said record high fuel price hike would have a negative impact on two-wheeler and commercial Vehicle sales will remain.
According to data shared by the industry body, total retail vehicle sales in all categories declined by 13.43% to around 14.99 lakh vehicles, mainly due to a sharp decline in two-wheeler sales (16.08% to about 10.91 lakh units), three. -Wheelers (about 50% to 33,319 units) and commercial vehicles (fell 29.53% to 59,000 units).
However, passenger vehicles and tractors saw good growth. With sales growth of 18.89%, the tractor segment continued its upward trajectory. FADA expects tractor registration to maintain overall registration in the near term.
In February, passenger vehicle (PV) sales rose 10.59% to 2.54 lakh units, altering India's BS-IV to BS-VI emissions criteria, despite a lower base for the previous year. “… the global semiconductor outage kept PV waiting periods high for eight months. FADA showed that 50% of PV dealers lost more than 20% of their sales due to unavailability of vehicles,” the industry body said.
It attributed the “sluggish demand” in two-wheelers to the new wave of COVID-19 in some states. “Levels of investigation also narrowed as many educational institutions were still reluctant to open. Fuel prices are at their historically high levels … entry-level prices put a brake on the sales of the sensitive category.
Additionally, it kept registration dark red for issues of financing the commercial vehicle segment, negligible sales of passenger buses due to the closure of educational institutions, and supply constraints.
FADA stated, “Consumer spending, which is the driving force behind India's economy and accounts for 60% of GDP, fell 2.4% in the festive season, indicating sluggishness despite the quarter. It also showed that the consumer Still unsure and worried about their income and cautious about spending. ”
India's growth engine will only see a full recovery based on the pace of the world's largest vaccination program. The rapid increase in new COVID-19 cases will thus reduce the speed of recovery and therefore affect overall auto demand.
The industry body also urged the government to hold diplomatic consultations with the countries that make semiconductors (Taiwan and other similar countries), so that the momentum that has remained so far in auto sales is not lost. “Overall, the FADA is guarding its vehicle optimism for vehicle registration in March,” it said.