Car Sales Rise 27% in 2021 Despite Shortage of Chips | Ahmedabad News

AHMEDABAD: Supply chain problems in the automotive industry triggered by the global semiconductor shortage have failed to dampen buyer sentiment in Gujarat, with car sales growing steadily by 27% in 2021 compared to 2020.
Driven by good demand and a growing preference for owning a vehicle for personal mobility following the Covid-19 restrictions, car sales have grown steadily over the past year. According to data provided by the Federation of Automobile Dealers Associations (FADA), car sales fell from 2.04 lakh in 2020 to 2.6 lakh in 2021. However, sales remained slightly lower by 5.8% against 2.76 lakh units sold in 2019 before the Covid epidemic.
“Demand for four-wheeled vehicles has been exceptionally good last year in the wake of a growing preference for personal vehicles. However, due to the continued shortage of semiconductors, resellers have not been able to take advantage of demand due to constraints on the supply side. Spending has picked up relatively well as people did not splurge on travel or other activities during the pandemic year, which propelled car purchases, ”said Pranav Shah, president of the region. from Gujarat, FADA.
In fact, if these bottlenecks had been resolved, growth would certainly have been better than the pre-Covid period, dealers suggested. Even two-wheeler sales showed a decent growth of 18% in 2021 with some 8.2 lakh of two-wheelers sold compared to 6.95 lakh in 2020.
However, sales of two-wheelers have remained modest compared to the pre-pandemic times – sales are down 28.2% from the 11.42 lakh units retailed in 2019.
Shah explained that the demand for two-wheelers has fallen mainly due to the rising cost of owning two-wheelers. “Two-wheeler sales have shown growth in demand, but the overall dynamics have remained subdued compared to the pre-pandemic period. While prices for two-wheelers have increased by 20% on average, fuel prices have also remained on the rise, both proving to be a disincentive for sales, ”he said.
Dealers have suggested that the loan rejection rate has also increased. “More and more customers are facing rejection of their auto loan applications because their CIBIL score is low and their income has suffered. Even rural demand is low due to unusual rainfall and the build-up of farm debt. Therefore, despite a good inventory, sales have remained modest, ”said an Ahmedabad-based two-wheeler dealer.