The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for August’21.
Commenting on how August’21 performed, FADA President, Mr. Vinkesh Gulati said, “Auto Dealers are facing the most challenging phase of their business career as Covid-19 after-effect continues to play spoil-sport. While until last year, when demand was a challenge, supply is becoming a bigger problem currently due to shortage of semi-conductors, even though there is high demand for passenger vehicles.
Every dealer by now starts planning for a bigger offtake in anticipation of a bumper festive but due to supply issues, inventory levels are at lowest levels during this Financial Year.
The 2W market is highly price sensitive. With multiple price hikes, increased fuel cost coupled with Educational Institutions remaining closed, the impact could be felt on the overall segment. Customers continued to fight financial battle due to Covid related health issues and hence remained away from dealerships resulting in low enquiry and lower sales. This has its impact on the entry level segment which continues to face the biggest brunt.
CV segment continues to witness some recovery coming back majorly due to low base of last year. While SCV’s had already shown good recovery due to intra city goods movement, M&HCVs are picking up pace only in specific geographies where the Government is rolling out infrastructure projects. Acquisition cost post BS-6 implementation along with financers keeping away from the segment and high fuel cost continues to restrict recovery in CV demand.“
Near Term Outlook
With OEMs drastically cutting down productions due to unavailability of semi-conductors & ABS chips, shortage of containers and high metal prices, customers for the first time may not get a vehicle of their choice and lucrative schemes during this festive season. Ultra-frequent price increase is also keeping entry level buyers at bay.
Customers especially at the bottom of the pyramid are shifting their priority from saving instead of spending. This will hence keep demand for 2-wheelers a concern. Though, with Educational Institutions slowly opening up, a ray of hope can be seen for an improved demand in 2-Wheeler category in coming months.
FADA thus sees that the near term outlook will continue to remain a mixed bag with PVs witnessing demand-supply mis-match and 2W facing a demand crunch.
Inventory at the end of July’21
Average inventory for Passenger Vehicles ranges from 25-30 days
Average inventory for Two – Wheelers ranges from 20-25 days
40.6% Dealers rated it as neutral
37.8% Dealers rated it as good
21.7% Dealers rated it as bad
Upcoming Festive Season
44.9% Dealers rated it as Good
40.4% Dealers rated it as Neutral
14.6% Dealers rated it as Bad
Chart showing Vehicle Retail Data
All India Vehicle Retail Data for August’21
% Chg, AUG’19
Source: FADA Research
The above numbers do not have figures from AP, MP, LD & TS as they are not yet on Vahan 4.
Vehicle Retail Data has been collated as on 05.09.21 in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,313 out of 1,527 RTOs.