New Delhi, Jan 5 (Agency) With India once again staring at the spectre of movement restrictions in the wake of the rapid spread of Omicron wave amidst the ongoing semi-conductor shortage crisis, the auto industry is headed for further impact on vehicle retails which declined 16% on YoY basis for the month of December ’21 and when compared to December ’19 (a regular pre-covid month), continue to fall by 6%, according to retail data for December released by the Federation of Automobile Dealers Associations (FADA) on Wednesday. Covid restrictions by various state governments, resumption of work and education from home and concern over health care expenses rising again will have a negative effect for auto retail as customers shy away from closing their purchase decisions, according to FADA President Vinkesh Gulati.
A FADA members’ survey on the retail outlook for January 2022, shows 39.3% with flat expectation, 31.2% expecting de-growth and 29.5% seeing growth. The average inventory for passenger vehicles at the end of December ranged from 8–10 days and that for 2W from 30–32 days. On the liquidity situation, 45.1% said it was good, 29.5% were neutral and 25.4% said it was bad. While sentiment was good in 36.4% of the members, 32.9% were neutral and 30.6% were bad. According to FADA data, on YoY basis, sales of passenger vehicle in December 2021 show a YoY decline of 20 per cent despite huge bookings with consistent long waiting period acting as a spoilsport. Three wheelers and commercial vehicles were up by 59% and 14% respectively while 2Wheelers, PV and tractors fell by 20%, 11% and 10% respectively. Caught amidst cautious customers, the rising 3rd wave of Covid and low rural sentiments, 2W sales showed no sign of recovery. “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,” said Gulati. “It was however not the case this time around as retail sales continued to disappoint thus wrapping up an underperforming calendar year,” he added.