“High cost of ownership, bad rural sentiment, work from home and the latest threat of Omicron continued to impact sales," FADA said.

Cars parked for shipmentPicxy.com / Dreamworks
Money Automobiles Wednesday, January 05, 2022 - 19:47

Total vehicle retail sales for the month of December 2021 declined by 16% on a year-on-year (YoY) basis. When compared to December’19 (a regular pre-COVID month), overall retail sales continue to fall by 6%, according to data released by the Federation of Automobile Dealers Associations (FADA). As compared to last December, passenger vehicles sales have fallen by 11% and two-wheelers by 20%. 

FADA President Vinkesh Gulati said that December is usually a high sales month, but it was not the case this month. “With semi-conductor shortage continuing to play spoil-sport, PV sales in spite of huge bookings, in December closed in the red,” he said. 

Two-wheeler sales have also been on the decline and haven’t been recovering, with FADA stating that it showed no signs of recovery as customers continued to remain cautious with the rising third wave of COVID-19 and bad rural sentiments.

“High cost of ownership, bad rural sentiment, work from home and the latest threat of omicron continued to impact sales,” Vinkesh Gulati said.   

Commercial vehicle retail sales, however, rose 13.72% last month to 58,847 units, as against 51,749 units in December 2020. “CV segment continues to rise with M&HCV outshining LCV’s. The government’s push for infrastructure spending especially Road infrastructure, better freight rates, price hike announcement in Jan and a low base helped the overall segment close in positive double digits,” Gulati said.

FADA added that with increasing cases due to the Delta and Omicron variants, forn the near-term outlook it remains wary as various state governments have once again announced COVID restrictions. 

“Work and education from home have resumed and will have a negative effect on auto retail. With the fear of health care expenses rising again, the customers are shying away from closing their purchase decisions,” it added. With IIT Kanpur predicting the peak of Omicron sometime in the first week of February, FADA said it remains extremely cautious over the next 2-3 months.

Maruti Suzuki had the most market share at 42.31%, followed by Hyundai at 15.83% and Tata Motors at 12.65%. FADA collates data from 1,379 out of 1,590 RTOs across the country and does not include data from Andhra Pradesh, Madhya Pradesh, Lakshadweep and Telangana.

Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.