Automobile dealers experience ‘worst festive season in a decade’

Automobile dealers faced their ‘worst festive season’ in a decade, with retail sales declining 18% during the 42-day long festival period this year, the Federation of Automobile Dealers Associations (FADA) said on Thursday.

“This was the worst festive season in a decade for auto dealers as a semiconductor shortage in passenger vehicles, along with subdued demand for entry-level cars” hurt sales, said FADA President Vinkesh Gulati. “Customers in this category continued to conserve money due to their families healthcare needs,” he noted, adding that the two-wheeler segment continued to witness low sales.

“The rural distress in retails coupled with frequent price hikes, triple-digit fuel prices and customers conserving funds for healthcare emergencies kept the demand low. In fact, walk-ins and customer inquiries were also ultra-lean during the period,” Mr. Gulati observed.

Total retail sales across segments slid to 20.91 lakh units this festive period, from 25.56 lakh units in 2020, and 26.41 lakh units in 2019, FADA data show. Passenger vehicle registrations slumped 26% to 3,24,542 units, and two-wheeler sales declined by 18% to 15,79,642. Tractor sales also fell 23% to 56,841 units. However, commercial vehicles and three-wheelers saw sales grow 10% to 77,066 units and rise 53% to 52,802 units, respectively.

Given the huge backlog of orders in the PV segment, FADA said there was scope for a good recovery in retail sales towards the end of the year if OEMs were able to realign supply with demand. It also urged two-wheeler makers to come up with attractive schemes to help revive entry-level demand.