Retail auto sales have continued on their declining spree and the overall numbers fell 16.05% year on year in December to 15,58,756 units, according to data released by The Federation of Automobile Dealers Associations (Fada) on Wednesday. Passenger vehicle (PV) segment continued to face headwinds due to semiconductor shortage while the two-wheeler (2W) segment is yet to tide over the barrier of high ownership cost.
PV retails fell
The PV retails fell by 10.91% year on year to 2,44,639 units. While the original equipment manufacturers (OEMs) usually offer attractive year-end cash discounts in December to clear stocks, the supply-side bottlenecks prevented them from doing so this time around as the stocks were already low, although the demand was relatively strong. This has become evident from high bookings and long waiting-period on popular models.
Two-wheelers sales have declined 19.86% year on year to 11,48,732 units. The segment had been hit hard by the cost of ownership going up due to various price hikes by OEMs, and high fuel price.
At the end of December 2021, the average inventory for passenger vehicles was from 8 to 10 days, and for two-wheelers, it was from 30 to 32 days, as per the Fada data.
The commercial vehicle segment
The commercial vehicle segment continued with the recovery momentum with retails rising 13.72% year on year to 58,847 units. While MCVs and HCVs have done far better than LCVs, the segment, on the whole, was aided by a low base. The three-wheeler segment also saw sales jumping 59.50% year on year to 44,288 units during the month. However, tractor sales fell 10.32% year on year to 62,250 units.
Regarding the near term outlook, Fada has said that with various state governments once again announcing Covid restrictions, work and education from home resuming, there is going to be a negative effect on auto retail.