Vehicle registrations fall 9%; ‘auto cos misjudged demand’

Retail sales of vehicles in India, as measured by their registrations, slipped back into the red in January after showing some improvement in the previous month.

Total vehicle registrations fell 9.7% on year to 1.59 mln units, the Federation of Automobile Dealers Associations said.

The automobile makers clearly misjudged the demand which returned post lockdown, it said. December had marked the industry's best recovery in sales since easing of lockdown restrictions in MayJune with sales rising 11% on year.

Factors such as non-availability of vehicles due to scarcity of semiconductors, a fading pent-up demand and recent price hikes hit figures for January, the industry body said.

Going forward, the industry body said it remains guarded in its optimism for automobile registrations in Jan-Mar, but said that factors like the rollout of the vehicle scrappage policy and COVID19 vaccine can contribute to better sales.

Retail sales of two-wheelers were hit in January as consumer sentiment in the country's large rural markets was dented due to the ongoing farmers’ agitation against three new agriculture legislation, the industry body said.

"For two-wheelers, the demand hasn't been that great in January primarily because of the farmers' issue and because two-wheelers are rural-based product, leaving aside premium vehicles," the federation's President Vinkesh Gulati told Informist.

For the passenger vehicle segment, chipmakers prioritising higher-volume and more lucrative consumer electronics market has created a shortage of semiconductors used in electronics of cars, it said.

This has resulted in a shortage in supply even though enquiry levels and bookings remained high, it added.