Despite Heavy Demand, 550,000+ Waiting Orders, Car Sales Down By 25% In India: Find The Shocking Reason Why!

In recent times, we have seen economy opening up. Vaccination drive is on in a full swing, offices are welcoming employees and even government is also easing the restrictions one after the other. All the indicators of a robust economy were showing an upwords trend. So, when everything showing an upwords trend, we have come across a piece of news which we can be termed as surprising one.

In October, Sale of Passenger Vehicles declined YOY

According to the recent report shared by the Society of Indian Automobile Manufacturers (SIAM), sales of passenger vehicles and two-wheelers remained in the red in October due to lack of adequate supplies of semiconductors and poor offtake.

Passenger vehicles (PV) which comprises of cars, SUVs and vans, saw 27 percent fall in wholesale dispatches to dealers to 226,353 units as compared to the same period last year. It should be noted that Data of Tata Motors, BMW, Mercedes, Audi and Jaguar Land Rover are not included in the sales total.

The major reason behind the fall is the inability of companies to match demand with supplies because of the crunch in availability of chips. The decline comes on the back of the industry sitting on pending orders of more than 550,000 units. With companies unable to deliver booked models within the usual time period, waiting periods have stretched to a year in some cases.

Two Wheeler demand was also worst in several years

Rural demand was poor in 2021 due to the after effects of the state-wise lockdowns earlier this year. High petrol prices and the continuous increase in product prices also impacted decisions significantly. According to Analysts the festive season of 2021 has been the worst in several years for the segment.

Incidentally, three-wheeler volumes grew by 19 percent to 31,774 units during October compared to the same month last year.

Rajesh Menon, Director General, SIAM said “Manufacturers were banking on the festive season to recover from the severe drop in sales they have faced in the early part of financial year 2021-22. However, shortage of semiconductors and steep hike in raw material cost have been a major spoilsport for the industry.”

Automakers have observed that there has been a slight improvement in supplies of semiconductors in the past few days and they expect the trend to continue in the coming months.