Auto sales continued to face headwinds due to global semiconductor shortage with the wholesale despatches during November, a festive month, being one of the worst.
As per data released by Society of Indian Automobile Manufacturers (SIAM), sales in November were lowest in seven years for passenger vehicles (PVs), lowest in eleven years for two-wheelers (2Ws) and lowest in 19 years for three-wheelers (3Ws). The industry’s hope of making up for the lost ground during the festive season was dashed, SIAM said.
Wholesale despatches across categories last month declined 32 per cent year-on-year (y-o-y) to 12,88,759 units. PV wholesales declined 19 per cent at 2,15,626 units. Similarly, total 2W sales declined sharply by 34 per cent to 10,50,616 units and total 3W despatches stood at 22,471 units, down 7 per cent y-o-y.
Shortage of semiconductor has led to cut in production by all the major PV manufacturers, which has led to supply side constraints leading to long waiting list for popular selling models.
Though the 2W industry does not get that heavily impacted by the semiconductor shortage as electronic items are mostly used in their high-end models, their domestic demand continues to be subdued as rural demand has been hit due to loss of income post the second wave of Covid-19.
“The fall in two-wheeler volumes is worrying as this shows the continuing economic stress due to job losses and pay cuts. The reasons for these are the pandemic and the increase in the operating expenses, owing to the rise of petrol prices. Additionally, the rural economy has been unable to fire up sales,” Ashim Sharma, partner and group head, NRI Consulting and Solutions, said. FE