Impact of the worst Diwali chip crisis in 10 years for auto industries

This Diwali was the worst in 10 years for auto companies in terms of vehicle sales. Vehicle demand was the weakest, especially in northern India, where people often wait for Diwali to buy a new car.

Industry sources say the period from Navratri to Diwali is the best time to sell vehicles. But in this 30-day period, vehicle registration dropped by double digits compared to the same period last year. The passenger vehicle segment has been affected by supply constraints. Due to the lack of chips, auto companies had to drastically reduce production.

There was also an unexpected drop in demand for two-wheelers. According to sources, this time in the holiday season retail sales of passenger cars are down by a third. About 3.05,000 passenger vehicles were shipped to dealerships during this period, up from 4.55,000 units in the same period in 2020. At the same time, according to the government vehicle portal, a total of a total were sold this holiday season. of 2,38,776 vehicles, which represents 22 percent less than the 3,05,916 vehicles sold in the same period of 2020. The VAHAN portal collects data from 85% of the Regional Transportation Offices of the country.

Two-wheelers and tractors also fall
A total of 10.7 lakhs of two-wheelers were registered during the holiday season, which is 11% less than last year. Tractor registrations also decreased by 13 percent during this period, indicating that there was pressure in rural areas as well.

67 percent increase in sales of tricycles
HGVs and tricycles have seen retail sales rise by 88 percent and 67 percent, respectively, in the holiday season amid declines in passenger and two-wheelers.

Higher sales in UP, decrease in other states

State Sales
Uttar Pradesh 3.5% more
Maharashtra, Karnataka, Kerala 6-9 percent drop
Delhi, Bihar, Gujarat, Punjab, Rajasthan, Haryana 15-22% drop

(Delhi, Bihar, Gujarat, Punjab, Rajasthan, Haryana account for 30 percent of vehicle sales)

Customers awaiting delivery
Passenger car dealers were left with raw materials for less than half of the 1.20 lakh units through the end of October. With this, only 8-10 days of delivery could be completed. Because of this, customers are waiting for the delivery of reserved cars and SUVs before festivals.

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