Retail Sales Of Passenger Vehicle Skid 8% In February On Chip Shortage, Says FADA

The PV sales dropped to 2,38,096 units last month, down 7.84 per cent from 2,58,337 units in February 2021

FADA warns that the Russia-Ukraine conflict could further impact the production of semiconductors. Image: Getty

New Delhi: Sales of passenger vehicle (PV) retail sales in India fell 8 per cent in February due to chip shortage, automobile dealers' body Federation of Automobile Dealers Associations (FADA) said on Friday.

The PV sales dropped to 2,38,096 units last month, down 7.84 per cent from 2,58,337 units in February 2021.

Quoting FADA President Vinkesh Gulati, the PTI said, “Even though the passenger vehicle (PV) segment saw some launches and slight respite in supply due to better production, it was not enough to meet customer demand. Vehicle waiting period thus remains similar to what it was in the past few months.” The industry body warned that the Russia-Ukraine conflict could further impact the production of semiconductors.

"Russia is one of the largest producers of rare-earth metals, especially Palladium, which is an essential metal for semiconductors. Ukraine, on the other hand, is one of the biggest producer and exporter of neon gas, which is used in the manufacturing of semiconductors. Due to the ongoing war, we once again fear the shortage in semiconductors which will create additional supply side issues for PVs,” the FADA noted.

Two-wheeler sales last month declined 10.67 per cent to 9,83,358 units, compared with 11,00,754 units in February 2021.

Gulati said rural distress coupled with a price rise has led to a drop in the sales in the segment.

"The two-wheeler segment is showing no signs of recovery as Bharat continues to play spoil-sport. With the cost of acquisition continuously going north, the inquiry level remained weak. As corporates and educational institutions continued operating from home, urban demand also took a hit," he stated.

Commercial vehicle sales, however, witnessed a growth of 7.41 per cent last month at 63,797 units, as against 59,395 units in the year-ago month, while tractor sales stood at 50,304 units last month, down 18.87 per cent from 62,004 units in February 2021.

The total sales across categories last month declined by 9.21 per cent to 13,74,516 units from 15,13,894 units in February 2021.