New Delhi, Sept 8 (KNN) Total vehicle registrations rose by 14.48 per cent to 13,84,711 units in August 2021 as against 12,09,550 units registered in August 2020, said the Federation of Automobile Dealers Associations (FADA).

According to FADA's vehicle registration data released on Tuesday, although total vehicle retails for the month of August 2021 rose by 14.48 per cent on year on year, when compared to August 2019 (a regular pre-covid month), retails are still down by 14.75 per cent.

On YoY basis, all categories were in green with 2W up by 6.66 per cent, 3W up by 79.70 per cent, PV up by 38.71 per cent, Tractor up by 5.50 per cent and CV up by 97.94 per cent.

Both Tractors as well as PVs continue to see robust demand as they grow by 35.98 per cent and 31.67 per cent when compared to August’19, a pre-covid month.

FADA said it first raised demand supply mismatch in January 2021 due to shortage of semiconductors in a few brands. The association confirmed that it has now become a full-blown crisis with no light in sight. It also warned of a lacklustre festive season specially for PV dealers as inventory level continues to dip due to non-availability of the fast-moving variants.

Commenting on how August 2021 performed, FADA president, Vinkesh Gulati said, Auto Dealers are facing the most challenging phase of their business career as Covid-19 after-effect continues to play spoil-sport. Until last year, when demand was a challenge, supply is becoming a bigger problem currently due to shortage of semiconductors, even though there is high demand for passenger vehicles.

''Every dealer by now starts planning for a bigger offtake in anticipation of a bumper festive season but due to supply issues, inventory levels are at lowest levels during this Financial Year. The two-wheeler market is highly price sensitive. With multiple price hikes, increased fuel cost coupled with educational institutions remaining closed, the impact could be felt on the overall segment,'' he added.

He further said that the customers continued to fight financial battles due to Covid related health issues and hence remained away from dealerships resulting in low enquiry and lower sales. This has its impact on the entry level segment which continues to face the biggest brunt. The CV segment continues to witness some recovery coming back majorly due to the low base of last year.

Acquisition cost post BS-6 implementation along with financers keeping away from the segment and high fuel cost continues to restrict recovery in CV demand, he said.

With OEMs drastically cutting down productions due to unavailability of semiconductors & ABS chips, shortage of containers and high metal prices, customers for the first time may not get a vehicle of their choice and lucrative schemes during this festive season. Ultra-frequent price increase is also keeping entry level buyers at bay, he said.

''Customers especially at the bottom of the pyramid are shifting their priority from saving instead of spending. This will hence keep demand for 2-wheelers a concern. Though, with Educational Institutions slowly opening up, a ray of hope can be seen for an improved demand in the 2-Wheeler category in coming months,'' he added.