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Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has showed the 3% sequential decrease in the domestic auto sales volumes (excluding CVs) in December 2021 was due to a continued poor demand for entry-level 2Ws, deferral in re-opening of colleges & offices, increased cost of ownership and production constraints in the premium segment 2W (>150cc) and PVs amid the semi-conductor shortage. On a yoy basis, the overall production and domestic sales volumes fell 14% and 11% respectively, while exports remained stable in December 2021.

According to the report, while there was a sequential recovery at 2% mom in domestic PV sales, they fell 13% yoy in December 2021. The sequential growth was supported by a 12% mom increase in passenger car sales, owing to a high consumer demand, but was offset by a 8% mom decrease in utility vehicles (UVs) sales. The sales growth in PVs remains constrained by lower production owing to the chip shortages, even as demand remains robust as evident in the lower dealership inventory. On a yoy basis, domestic PV demand continued its shift towards UVs, as the segment’s sales grew by 3% yoy as against a 13% yoy decrease in the overall domestic PV segment sales.

The report further said that 2Ws sales fell 11% yoy and 4% mom in December 2021. The sequential drop was owing to a 20% and 22% mom decrease in scooter and moped sales, respectively, while supported by a 4% mom increase in motorcycle sales. The recovery in 2Ws continued to be affected by the muted demand for entry-level 2Ws, especially due to a slow recovery of the rural market after COVID-19, the deferral in opening of colleges/offices and increased cost of ownership.