The Indian car market experienced a dip in sales after the production of semiconductors slowed down and waiting periods increased.
The Federation of Automobile Dealers Association released new data on October 7 that showed 12 million units were sold last month, which is 5% less than what was reported during September 2020 when 1368307 vehicles changed hands at dealerships across India.
The overall vehicle retail sales fell to 12-million from 13 68 307 compared with beginning this year.
Still, some improvement has resulted in lower manufacturing output due to a shortage of supply chain issues coupled long waiting period.
How did the problem start?
In September, retail sales for vehicles increased by 16.32%. During that same period in 2020-09 to be exact – we saw a rise from 200k units sold then up over 233k this year’s total, which is an increase by 50%!
It could be attributed mainly to the pandemic taking its toll on car purchases back when it first hit America.
So if anything seems low or stagnant, now think how much higher things would have gone without such restrictions imposed during those dark days after everything calmed down again following panic mode, aka ‘the calm before…’
The recent uptick seen throughout many industries, including automotive, has been nothing short of fantastic considering what happened one year ago.
The semiconductor crisis is a severe hindrance to the current PV sales. High demand for vehicles has caused consumers to wait up 15-20 days before they can purchase their desired car models and be satisfied with its features.
The Demand
The growing 2-wheeler (2W) segment is now threatening to stop the recovery of motorcycle sales, but fortunately, FADA believes some positive signs will help things for this part.
“The performance in this category has been critical as it can lead other segments on a path towards good growth again over winter months when inventory runs low and shortages begin impacting prices,” Gulati said.
Other bikes are beginning to feel the effects of this shortage, too. 150+ cc motorbikes have also been impacted because they rely heavily upon electric motors, which use lots of batteries for power—and there is not enough available!
The three-wheeler (3W) division is showing manifest signs of a tactical substitution from ICE to EVs as the degree has hit 60:40.
According to FADA, with offices and educational institutions slowly opening up, electrification will gather higher momentum in the months ahead.
The market division for internal burning engine vehicles suchlike cars or motorcycles may be declining while that data reveals how quickly electric bikes are catching on with distinct buyers.
This change can also affect negotiations among organizations who currently use these applications but might reconsider going green if their current fleet is not entirely eco-friendly yet.
FADA’s CEO Fakher said that they are in an extreme shortage for the next two quarters, likely continuing to hinder solar panel demand.
It is because even if original equipment manufacturers (OEMs) come out with new launches – at least initially- it seems unlikely these efforts can make up for what could have been sold by now if only there were more panels available.
Entering into a new era, those who have been left behind by the rapid changes in technology and fuel prices are now being faced with an increased risk of isolation as they cannot afford to purchase vehicles.
There is also less likely for another wave due to these factors and offices opening up at different rates throughout India.
FADA expects this trend line will continue its downward trajectory over time until 2-3 years from now where we will see some recovery occur.
