Automobile registrations fall 5.27% in Sept

The registration of automobiles in September, on account of the low base last year, showed a small decline of 5.27 per cent, but when compared with September 2019, the pre- Covid period, the drop is a sharp 13.5 per cent.

The year-on-year (y-o-y) decline during the month was dragged down by a 11.5 per cent and 23 per cent drop in sales of twowheelers and tractors, respectively, according to the Federation of Automobile Dealers’ Associations (FADA).

Albeit on a low base, sales of commercial vehicles (CVS) showed the strongest y-o-y rebound, advancing 46 per cent y-o-y.

Heavy CVS led the rebound with 189 per cent growth. In comparison with FY19, CV retails in September were down only by a marginal 1.50 per cent.

For the first time in the past 18 months, medium CVS rose above pre-pandemic levels of 2019.

FADA has requested two-wheeler makers to give special schemes to aid revival in the entry-level two-wheeler (below 125 cc) segment, which is under pressure. This segment’s performance is now becoming critical for two-wheelers as whole to recover as dealer inventories rise to 30-35 days in anticipation of a good festive season.

The semiconductor shortage has also started impacting the 150+ cc segment.

Meanwhile, the semiconductor shortage, which worsened in the recent past, continues to weigh on passenger vehicles (PVS). Dealers are not able to meet customer demand.

During the first half of this financial year, while the retails were up 35 per cent, they crimped 29 per cent over 2019.

The three-wheeler segment, said FADA, is now showing signs of a tactical shift from internal combustion engine-powered vehicles to electric vehicles. The ratio (ICE to EV) has hit 60:40. With offices and educational institutions reopening, the electrification of three-wheelers will gather greater momentum, said FADA.

With India entering the 42-day festive period beginning Thursday, the near term outlook for this season will be mixed. While two-wheeler dealers have seen an increase in inventories, those of cars are at their lowest during this year due to the ongoing semiconductor crisis.

The chip shortage looks unlikely to ease in the next two quarters. As a result, car sales are likely to stagnate. This is despite a slew of launches. Skyrocketing fuel prices and a drop in purchasing power are going to be another deterrent as entry-level customers in rural India are keeping themselves away from fulfilling their mobility needs.