BS-VI norms, chip shortage may hit PV sales in March

Navratri in March-April is traditionally the second busiest period for automotive sales after the main festive season of October-November. However, passenger vehicle sales are likely to grow at a slower pace this time, dealers said.

“PV production was regularly in the ballpark of 320,000-340,000 units per month. But in January and February, production dropped to 325,000 units in January and only about 300,000 in February. So, while production has increased year-over-year , we can see that the numbers have fallen sequentially as OEMs are producing cautiously in view of the new regulatory norms. This is affecting product availability,” said Vinkesh Gulati, director, United Group.

While supply chain challenges have escalated due to shortage of electronic components, demand for newly launched vehicles and SUVs is growing at a moderate pace, even as the entry-level car segment remains under pressure.

Carmakers are offering discounts on entry-level models and popular models like Kia’s Seltos SUV to clear the stock ahead of the launch of the new-gen facelift.

“Dealers are under pressure to liquidate all BS-VI Phase-I stocks within this month, so we expect sales to increase by 15-20% in March as compared to February and 10-10% in a year. There will be an increase in the area of ​​12%. Based on the year. Due to the Navratri week starting in March, we will be able to sell a good amount without much discounting,” said Gulati.

“There are many festivals in March like Holi, Ugadi, Gudi Padwa and Navratri. This will help in increasing auto sales. Besides this, better availability of vehicles, change in on-board diagnostic norms from April, which will increase vehicle prices, industry may see plans being launched by OEMs, thus supporting higher sales,” the federation said. of Automobile Dealers’ Association (FADA) said in a statement.

Vehicle registration data released by FADA showed that total retail sales of vehicles increased by 16% in February.

Sales of two-wheelers, three-wheelers, passenger vehicles, tractors and commercial vehicles grew by 15%, 81%, 11%, 14% and 17%, respectively.

Meanwhile, the demand for two-wheelers, which has been badly hit, is in the recovery phase.

“Demand for two-wheelers is recovering; It’s not growing—we still have to capture it [5 million] Or so the shortage of units we have before our peak pre-Covid-19 levels, before the sector can start growing,” Gulati pointed out Peppermint,

Auto dealers are cautious about demand despite long waiting periods for passenger vehicles as macroeconomic indicators suggest a slowdown in rural spending.

“The Chief Economic Advisor of India said that urban demand is recovering at a faster pace than rural. This, along with a sharp deceleration in private consumption expenditure to a two-year low, suggests a softening of demand for household spending amid inflationary pressures as post-Covid demand begins to taper off,” Fada said. .