FADA keep fingers crossed as another virus peak feared in Feb 1st week

MUMBAI, Jan 5 (The CONNECT) – The total vehicle retails for the month of December’21 decreased by 16% on a year-on-year basis. Data from the Federation of Automobile Dealers Associations (FADA) shows, when compared to December’19 - a regular pre-covid month - overall retails continue to fall by 6%.

The 3W and CV (commercial vehicle) were up by 59% and 14% on YoY basis, but 2W, PV (passenger vehicle) and Tractors fell by 20%, 11% and 10% respectively.

PV sales continue to face the brunt of semi-conductor shortage with consistent long waiting period

2W sales show no sign of recovery as customers continue to remain cautious with rising 3rd wave of Covid and bad rural sentiments.

M&HCV segments continue healthy growth with low base of last year and bring CV sales at almost pre-covid levels. India once again starts facing the heat of Delta/Omicron wave with many states now starting to put movement restrictions thus which will further impact sales

FADA president Vinkesh Gulati said, “The month of December is usually seen as a high sales month where OEMs continue to offer best discounts to clear the inventory due to change of year. It was however not the case this time around as retail sales continued to disappoint thus wrapping up an underperforming calendar year.”

With semi-conductor shortage continuing to play spoil-sport, PV sales in spite of huge bookings, in December closed in red. Dealers however saw slight ease in vehicle supply thus giving some hope of improvement, he said.

The 2W segment, however, was on a different trajectory when compared to PV. High cost of ownership, bad rural sentiment, work from home and the latest threat of omicron continued to impact sales.

CV segment continues to rise with M&HCV outshining LCV’s. The government’s push for infrastructure spending especially Road infrastructure, better freight rates, price hike announcement in Jan and a low base helped the overall segment close in positive double digits, Gulati explained.

India is once again under the grip of Covid with Delta/Omicron affecting people at an ultra-fast pace. This has also ignited the 3rd wave.

Various state governments have once again announced covid restrictions. Work and education from home have resumed and will have a negative effect for auto retail. With the fear of health care expenses rising again, the customers are shying away from closing their purchase decisions.

With IIT Kanpur predicting the peak of omicron sometimes in 1st week of February, FADA hence remains extremely cautious over the next 2-3 months.