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Disruption in supply chain may impact retail sales of passenger vehicles

Purchase of passenger vehicles got a boost in the last few months from the overall improvement in economic activity and customers' need for personal mobility to avoid the covid-19 infection. (Ramesh Pathania/Mint)Premium
Purchase of passenger vehicles got a boost in the last few months from the overall improvement in economic activity and customers' need for personal mobility to avoid the covid-19 infection. (Ramesh Pathania/Mint)

  • Waiting periods on popular products of almost all leading passenger vehicle manufacturers are at least more than a couple of months and in some cases as high as six to eight months

At a time when retail demand is coming back to the market, passenger vehicle manufacturers are not able to supply adequate number of vehicles to meet the demand. Waiting periods on popular products of almost all leading passenger vehicle manufacturers are at least more than a couple of months and in some cases as high as six to eight months.

According to dealers, this is good for the companies since discounts will be low; but some of retail sales are getting lost due to extremely high waiting periods.

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Passenger vehicles witnessed double-digit growth on a low base of last year when the industry started transitioning from BS-IV to BS-VI emission norms. Due to shortage of semiconductors, the waiting period on some products were as high as eight months and a survey of Federation of Automobile Dealers Associations (FADA) shows that 50% dealers lost more than 20% sales due to non-availability of vehicles, said Vinkesh Gulati, president, FADA.

“The federation also urges the Union government to hold diplomatic discussions with countries manufacturing semiconductors (Taiwan and other similar countries) so that the momentum which was built thus far in auto sales is not lost and the auto industry continues to fuel the recovery process," added Gulati in a statement.

Purchase of passenger vehicles got a boost in the last few months from the overall improvement in economic activity and customers' need for personal mobility to avoid the covid-19 infection.

Wholesale dispatches of Maruti Suzuki India Ltd, the country’s largest carmaker, increased by 9.9% to 147,483 in February, while the same for Hyundai Motor India Ltd, the second largest, also jumped by 29% to 51,600 as a result of increased demand for its sport utility vehicles. Mumbai-based Tata Motors also reported a 119% jump in dispatches to 22,725 units.

“We don’t have adequate number of vehicles with us at the moment and the ones in demand have long waiting lists. Also, the supply coming from the companies is also not according to what dealers are asking for. Demand in the market is quite good now but customers don’t want to wait for vehicles after a point. Hence, it’s not very good for the dealers," said a dealer based in the Delhi.

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