Auto sector upset due to chip shortage, fear of huge losses this festive season, half the sales are done in just two months

Auto sector upset due to chip shortage, fear of huge losses this festive season, half the sales are done in just two months

Due to lack of supply, dealers are not able to provide their customers the vehicles of their choice.

Chip shortage: Due to the semiconductor crisis, this festive season is expected to be bad for the auto sector. Due to chip crisis, vehicle manufacturers are not able to ensure adequate supply to the dealers. Due to this, there is a possibility of heavy loss to the dealers this festive season. Federation of Vehicle Dealers Associations (FADA) President Vinkesh Gulati has expressed this opinion.

Gulati said, “Chip’s crisis continues. In such a situation, the manufacturers have to deal with the issues of production. They are reducing the supply to their dealer partners.” From the first day of Navratri, a busy 42-day session has started for the vehicle dealers. Due to lack of supply, dealers are unable to assure their customers to wait for the delivery of the vehicle of their choice. Bookings are getting canceled with dealers amid huge demand for many models. At the same time, due to lack of adequate stock with the dealers, there is also a decrease in on-the-spot purchases.

40 percent of annual sales only in festive season

Gulati said, “The festive season is the most important for us in terms of sales. On an average, in these two months, we achieve 40 per cent of our annual sales. This is the time when we are able to earn and save for the rest of the year’s operations. This year we are not getting enough number of vehicles. In such a situation, we are apprehensive of loss.

Waiting period extended for passenger vehicles

He said the ‘waiting period’ for most models in the passenger vehicle segment has increased significantly as compared to the earlier one to three months. Sales on the spot have also been affected due to non-availability of vehicles at the dealership. Gulati said, “According to our data, 50-60 per cent of the buyers make pre-bookings. At the same time, the remaining 40 percent come to the showroom and buy the vehicle immediately. But this chapter is closed for us now.

Normally 4.5 lakh vehicles are sold in the festive season.

Describing the whole situation as very challenging, he said that if the industry is able to achieve normal sales in these 42 days, then it will be considered very lucky. He said, “We are apprehensive of a big loss. Our retail sales range from 4 to 4.5 lakh units during the festive season. But this time it is estimated to be only 3 to 3.5 lakh units. If we can achieve this figure also, we will be very lucky.

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Shehnaz Ali
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

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