Total vehicle registrations rose by 14.48% to 13,84,711 units in August 2021 as against 12,09,550 units registered in August 2020.
The Federation of Automobile Dealers Associations (FADA), apex national body representing automobile dealers in India, on Tuesday, 7 September 2021, released monthly vehicle registration data for August 2021.Although total vehicle retails for the month of August 2021 rose by 14.48% on year on year, when compared to August 2019 (a regular pre-covid month), retails are still down by 14.75%.
On a year-on-year basis, all categories were in green with two-wheeler segment rising by 6.66%, three wheeler space up by 79.70%, passenger vehicle segment up by 38.71%, tractor rising by 5.50% and commercial vehicle segment growing by 97.94%.
FADA said it first raised demand supply mismatch in Jan 2021 due to shortage of semiconductors in few brands. The association confirmed that it has now become a full-blown crisis with no light in sight. FADA also warned of a lacklustre festive season specially for PV dealers as inventory level continues to dip due to non-availability of the fast-moving variants.
Commenting on how August 2021 performed, FADA president, Vinkesh Gulati said, 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. 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. The two-wheeler market is highly price sensitive. With multiple price hikes, increased fuel cost coupled with educational institutions remaining closed, the impact could be felt on the overall segment. Customers continued to fight financial battle due to Covid related health issues and hence remained away from dealerships resulting in low enquiry and lower sales. This has its impact on the entry level segment which continues to face the biggest brunt. CV segment continues to witness some recovery coming back majorly due to low base of last year. Acquisition cost post BS-6 implementation along with financers keeping away from the segment and high fuel cost continues to restrict recovery in CV demand.
Commenting on future outlook, FADA said, With OEMs drastically cutting down productions due to unavailability of semi-conductors & 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. 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 hence keep demand for 2-wheelers a concern.
The Nifty Auto index was down 0.21% to 10,146.25.
Tata Motors (down 1.04%), Mahindra & Mahindra (down 0.58%), Ashok Leyland (down 0.57%), Escorts (down 0.53%), Hero MotoCorp Ltd (down 0.35%), SML Isuzu (down 0.35%) and Bajaj Auto (down 0.21%) were top losers in auto space.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
