Worst Festive Season In Last 10 Years For Indian Auto Sector; Sales Dip By 18% Due To This Shocking Reason

Festival season in India, especially the one occurring in the September-November period is a remarkable period for companies, especially auto, technology, and e-commerce services providers, along with the retail and fashion sectors to cash-in stellar gains and surge their sales figures and revenues.

Speaking of the automobile industry in the country, the festival season starting from Ganesh Chaturthi and ending with Diwali, is an eagerly-waited period for this sector, as the customer demand for passenger vehicles, and others increase.

However, according to the data collated by the Federation of Automobile Dealers Associations (FADA), festival season 2021 marked the worst business year for the auto industry in the country, in the past 10 years.

Auto Sales Decline 18% in 2021

The highly-anticipated 42 day-long festival season in 2021 witnessed a decline in the country’s automobile retail sales by 18% on a YoY basis, selling nearly 20,90,893 units of vehicles this festive season, compared to about 25,56,335 units sold in the same period last year.

The vehicular units included in the count are passenger vehicles, two-wheelers and tractors.

The reason for this decline in vehicle sales is the ongoing global semiconductor chip supply slump. 

According to the President of FADA, Vinkesh Gulati, “Semiconductor shortage which was already a full blown crisis showed its true colours when in spite of an above healthy demand, we could not cater to customer’s need as SUV, compact-SUV and luxury categories witnessed huge shortage of vehicles.”

He added this festive season saw the worst results for the overall retail sales in the automobile sector in a decade.

Different Sales Figures

As mentioned above, automobile retail sales slipped 18% YoY to 20,90,893 units during this year’s festival season.

Passenger vehicle registrations declined by 26% to 3,24,542 units, compared to 4,39,564 units in last year’s festive season.

The entry-level cars section witnessed a subdued demand, as its target customers continued to conserve money due to economic uncertainties, states HT.

The sales of two-wheelers declined by 18% to 15,79,642 units in the festival season 2021, against 19,38,066 units in 2020.

Tractor sales fell 23% to 56,841 units in 2021, compared to 56,841 units last year. 

The two-wheeler category continues to face the brunt of low sales with the entry level category being the biggest spoilsport, states Gulati.