Chip shortage hits domestic passenger vehicle wholesales in September; despatches drop 41% year-on-year

Passenger vehicle wholesales in India witnessed a 41% year-on-year decline in September as semiconductor shortage hit production leading to a drop in supplies from manufacturers to dealers, auto industry body SIAM said on October 14.

Last month, passenger vehicle (PV) sales stood at 1,60,070 units as compared with 2,72,027 units in the year-ago period.

As per the latest data by the Society of Indian Automobile Manufacturers (SIAM), two-wheeler despatches to dealers also witnessed a dip of 17% to 15,28,472 units, compared with 18,49,546 in September 2020.

Motorcycle despatches declined 22% last month to 9,48,161 units as against 12,24,117 in the year-ago period.

Scooter sales were also down seven% to 5,17,239 units, from 5,56,205 units a year ago.

Three-wheeler sales, however, witnessed a 54% year-on-year last month at 29,185 units.

Vehicle sales across categories last month declined year-on-year by 20% to 17,17,728 units from 21,40,549 units.

Last month, the total production of passenger vehicles, three-wheelers, two-wheelers and quadricycles stood at 2,125,304 units, a drop of 19% as compared to September 2020.

In the July-September quarter, passenger vehicle wholesales, however, witnessed a marginal increase of 2% to 7,41,300 units as compared with 7,26,232 units in the same period of last fiscal.

Two-wheeler despatches during the September 2021 quarter stood at 41,13,915 units, down 12% from 46,90,565 units in the second quarter of the financial year 2020-21.

“The Indian automobile industry continues to face new challenges. While on the one hand, we are seeing a revival in vehicle demand; on the other hand, shortage of semiconductor chips is causing a major concern for the industry. Many members have curtailed their production plans,” SIAM president Kenichi Ayukawa said.

Coupled with the festive season demand, this has led to a long waiting time for the customers on popular models of some segments, he added.

“High raw material prices also continue to be a challenge. The industry is taking all possible measures to mitigate the impact of such supply chain issues and optimise production,” Mr. Ayukawa noted.

During the second quarter, total commercial vehicle wholesales rose to 1,66,251 units as against 1,33,533 units in the year-ago period indicating revival of growth in the segment.

Similarly, three-wheeler despatches rose to 70,899 units as compared with 46,695 units in the July-September quarter of 2020-21.

The sales number, however, remained small as compared with 1,80,899 units in the second quarter of 2019-20.

SIAM director-general Rajesh Menon said, “On the sales front, barring the COVID-19 period, H1 sales of passenger vehicles are still below 2016-17 levels, that of two-wheelers are below 2011-12 levels. That of commercial vehicles are below 2010-11 levels and that of three-wheelers are still below 2000-01 levels.”