{"id":112051,"date":"2021-02-10T14:39:24","date_gmt":"2021-02-10T14:39:24","guid":{"rendered":"https:\/\/precoinnews.com\/?p=112051"},"modified":"2021-02-10T14:39:24","modified_gmt":"2021-02-10T14:39:24","slug":"why-auto-sales-in-january-hit-speed-brake","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/why-auto-sales-in-january-hit-speed-brake\/","title":{"rendered":"Why auto sales in January hit speed brake"},"content":{"rendered":"
Shortage of semiconductors, price hikes pull January auto sales into red. Dec had seen sales grow for 1st time this FY, which dealers called a one-off.<\/strong><\/p>\n <\/strong><\/p>\n Retail sales of automobiles dropped by around 10 per cent in January to 1,592,636 units (two-wheeler, three-wheeler, passenger vehicles or PVs, commercial vehicles or CVs, and tractors) from 1,763,011 units a year ago.<\/p>\n This came just a month after retail sales grew for the first time this financial year in December, which dealers said was a one-off.<\/p>\n The reasons for the drop in January, dealers said, were shortage of semiconductors, price hikes, fading demand, among others.<\/p>\n Retail sales of PVs fell by around 4.5 per cent year-on-year (YoY) to 281,666 units in January, from 294,817 units a year ago.<\/p>\n Two-wheeler sales declined 8.78 per cent to 1,163,322 units, compared with 1,275,308 units the previous year.<\/p>\n Meanwhile, CV sales declined 24.99 per cent to 55,835 units, as against 74,439 units a year ago.<\/p>\n Similarly, three-wheeler sales fell 51.31 per cent to 31,059 units, from 63,785 units a year ago.<\/p>\n Vinkesh Gulati, president of the Federation of Automobile Dealers Associations (FADA), said: “The auto industry misjudged the demand post lockdown.<\/p>\n “The industry’s underestimation of post-Covid rebound, along with chipmakers prioritising higher-volume and more lucrative consumer electronics market, has created a vacuum for semiconductors.<\/p>\n “This has resulted in shortage in supply for all categories of vehicles, especially PVs, even though enquiry levels and bookings remained high.<\/p>\n “New launches and SUVs continued to see high traction and helped in restricting the overall PV registrations fall by a bigger margin,” said Gulati.<\/p>\n He said, the recent price hike announced by OEMs also added to woes, as two-wheelers have become more expensive.<\/p>\n CV registrations were hit as vehicle financing has not returned to normal and the high cost of BS-VI vehicles.<\/p>\n Last year, the auto industry was transitioning from BS-IV to BS-VI vehicles, and there were huge discounts on offer that led to higher sales and registrations.<\/p>\n With a high base, continued shortage of semiconductors, and gradual opening of academic institutions, FADA remains guarded on projections for auto registrations in Q4, Gulati said.<\/p>\n According to FADA, average inventory for PVs ranges from 10-15 days, while for two-Wheeler it is 30-35 days.<\/p>\n The Budget stressed on Atmanirbhar Bharat, and it finally brought a smile to the auto industry as its age-old demand of bringing in a vehicle scrappage policy (voluntary) saw light of day.<\/p>\n This and the announcements on inducting more buses for public transport, increased infrastructure spending, and building national highways will play a pivotal role in reviving the CV segment, Gulati said.<\/p>\n Photograph: B Mathur\/Reuters<\/strong><\/p>\n