Auto Sales Fall for 4th Straight Month

Retail sales of vehicles fell from a year earlier in December, the fourth consecutive month when they have remained in the negative, hurt by tepid demand for two wheelers, vehicle registration data show.

Vehicle registrations with regional transport offices, which are a good proxy for retail, declined 16% year-on-year last month.

Two-wheelers, the most popular mode of personal transport in India, saw a 20% decline in registrations. Sharp price increases over the past two years, high fuel costs, poor rural sentiment and work from home kept customers away from showrooms, especially in the entry-level segment.

The fear of a third wave of Covid-19 infections due to the Omicron variant of the coronavirus further impacted consumer sentiment.

Passenger vehicle (cars) registrations fell 11% year-on-year despite robust consumer demand, due to a shortage of semiconductors that forced manufacturers to limit production and a high base of last year. Meanwhile, commercial vehicles and three-wheelers fared better, growing 14% and 60%, respectively, over an exceptionally low base of last year.

The data were put together by the Federation of Automobile Dealers’ Associations from the road transport and highways ministry’s Vahan dashboard.

The data are incomplete as only 1,379 out of 1,590 RTOs in the country are on the Vahan platform. But they paint an accurate picture in terms of trends.

While the supply situation slightly improved on the passenger vehicles side, it was far from normal, he said. Car dealers were running low on inventory, holding about 8-10 days’ worth of stock on average, as per a FADA survey. The industry norm is to hold inventory for about a month.

Two-wheeler dealers were holding about 30-32 days’ of stock.

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