Car sales fall 13% in December as chip shortage hurts production

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New Delhi: Passenger vehicle sales in India slid last month despite a strong demand because the global shortage of semiconductors continued to impact production, even as calendar year sales breached the 3 million mark for only the third time in 2021.

As per data from industry body Society of Indian Automobile Manufacturers (SIAM), carmakers sold 219,421 passenger vehicles in the domestic market in December, down 13% year-on-year.

The decline in sales is lower at around 8% when the numbers of Tata Motors are included. Tata Motors, which has stopped reporting data on a monthly basis to SIAM. sold 35,299 passenger vehicles last month.

For the full year 2021, sales of passenger vehicles in the local market grew by about 27% to 3.08 million units. Passenger vehicles sales had previously crossed the 3-million mark in 2017 and 2018.

Automakers in India report wholesale dispatches from factories and not retail sales to customers.

In the financial year third quarter ended December, passenger vehicle sales fell 15% year on year to 761,124 units mainly due to a global chip shortage that forced almost all carmakers to cut down production.

Two-wheeler sales in the domestic market were down 25% to 3,598,299 units in the third quarter due to rise in acquisition costs and continued economic impact of the second wave of the pandemic in rural markets.

For December, two-wheeler sales fell 11% to 1,006,062 units.

“Quarter-3 sales including those of the festive season were not as per expectations,” said Kenichi Ayukawa, president of SIAM and managing director and CEO of Maruti Suzuki. “All segments are still behind by many years. Industry is working hard to maximise production and minimise the impact of supply constraints while ensuring safety of people in the entire value chain.”

Rajesh Menon, director general of SIAM, said passenger vehicle sales in the third quarter were largely affected by supply constraints while the two-wheeler segment was majorly impacted due to subdued demand.

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