Passenger vehicle dispatches fell by over 40 percent in September due to semiconductor crunch

Passenger vehicle wholesales in India witnessed a decline of 41 percent year-on year in September as automobile manufacturers struggled to produce adequate units owing to semiconductor shortage, auto industry body SIAM said on Thursday. Passenger vehicle sales last month stood at 1,60,070 units as compared with 2,72,027 units in the year-ago period. As per the latest data by Society of Indian Automobile Manufacturers (SIAM), two-wheeler dispatches to dealers also witnessed a dip of 17 percent at 15,28,472 units, compared to 18,49,546 in September 2020.

Motorcycle dispatches declined 22 percent last month to 9,48,161 units as against 12,24,117 in the year-ago period. Hero MotoCorp dispatches were down 32 percent year-on-year, while Royal Enfield wholesales dropped a whopping 62 percent last month. Scooter sales were also down seven percent at 5,17,239 units from 5,56,205 units a year ago.

Vehicle sales across categories last month declined year-on-year by 20 percent 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 per cent as compared to September 2020. In the July-September quarter, passenger vehicle wholesales, however, witnessed a marginal increase of 2 per cent to 7,41,300 units as compared with 7,26,232 units in the same period of last fiscal.

Two-wheeler dispatches during the September quarter stood at 41,13,915 units, down 12 per cent from 46,90,565 units in Q2 of 2020-21 financial year.

“Indian automobile industry continues to face new challenges. While on 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 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,” Ayukawa noted.