Vehicle sales remain on the road to recovery in March

Source: Livemint, April 08, 2021

Retail sales of cars and utility vehicles continued to improve in March on the back of sustained improvement in economic activity, despite the surge in coronavirus cases, and a shift in customer preference towards personal mobility to avoid covid-19 infection. A low base effect also aided the growth in passenger vehicle sales during the last month of FY21.

Showroom sales of passenger vehicles increased by 10.11% on a month-on-month (m-o-m) basis to 279,745 units during March, according to sales data released by the Federation of Automobile Dealers Associations (Fada). Sales were also boosted by the long waiting period on popular products because of a demand-supply mismatch.

Retails of passenger vehicles increased by 28.39% from March last year, when sales came to a halt because of the lockdown measures imposed to contain the outbreak of the covid -19 pandemic. Operations had remained suspended till the beginning of May and in some cases early June.

Tractors and passenger vehicles were the only two categories that saw healthy double-digit growth and the lack of growth in other categories can be associated with multiple factors such as the low base of last year, transition from BS-IV to BS-VI norms and India going under total lockdown, according to Vinkesh Gulati, president, Fada.

“A global shortage of wafers, which is an input for making semiconductors, continued to linger around and kept the waiting period for passenger vehicles as high as seven months. According to a Fada survey, 47% of passenger vehicle dealers said they lost more than 20% sales because of supply side constraints,” Gulati said. Retails of commercial vehicles continue to show signs of a pick-up after more than two years, on the back of a faster recovery in economic activity, albeit on a low base. Showroom sales of commercial vehicles increased by 14.15% m-o-m to 63,372 units.

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