2021’s festive period from Navratri to Diwali (October) marked the worst performance for India automakers in nearly a decade. Usually, sales of PVs peak during the period, however, the demand was much lower this year.
Further, two-wheeler and tractor sales dropped by about 10%. The major reason for this drop is supply-side challenges on semiconductors and lack of demand in entry-level segments for both PVs and two-wheelers.
In the commercial vehicles space, the situation was somewhat better with an increase in demand for interstate movement of goods.
The Indian auto industry is going through a rough period caused by rising fuel prices and a shortage of semiconductors which are resulting in production delays for manufacturers across India.
High upfront costs due to recent price hikes for components, and a global shortage of electronic components, such as semiconductors, are causing production issues, which, in turn, have extended the waiting period of popular automobile models.
“This is the worst festive season that the Indian auto retail has seen in the last decade,” said Vinkesh Gulati, FADA President. “The chip shortage is impacting supplies in PV, creating a huge shortage of vehicles in SUVs, compact SUVs, and the luxury segment.” High fuel costs, have further combined with inflationary pressures, have dampened the sales momentum. PSR
Aditya Kondejkar is Research Analyst–South Asia Operations for Power Systems Research
