The passenger vehicle segment, including cars, SUVs and vans, has seen a spurt in cancellations, with buyers unwilling to wait for an extended period to take delivery of their vehicles.
The shortage of semiconductors has extended the waiting period to 12 months for some models with high demand. While the industry is able to supply 2,00,000-2,50,000 units per month, the pending booking orders have more than doubled at around 5,50,000 units as per estimates.
President of Federation of Automobile Dealers Association Vinkesh Gulati said, “Booking cancellations have tripled as compared to the normal period. Cancellations are in the range of 40,000-45,000 per month. It was 15,000-20,000 per month during June, July and August. Cancellations increased during the festival period as customers wished to receive delivery of the vehicle on a certain date, but failed to receive it. ,
Buyers flock to used cars
Ashish Gupta, Brand Director, Volkswagen Passenger Cars India, said, “The last few months have seen an increase in demand for used cars, which may be due to the long waiting period in the new car market.”
Although there has been a spurt in cancellations of new cars, frequent bookings have made up for the loss. According to Gulati, the industry has been getting 5-10 per cent growth in bookings every month for the last four months. However, buyers are resorting to multiple bookings for the same model but across multiple dealerships. This leads to duplication in data aggregation.
“We are getting 2,00,000-2,50,000 bookings every month. We are retailing the same number and that is why the outstanding booking numbers remain unchanged,” Gulati said.
Consumer interest in new cars continues to remain high despite several price hikes by automakers since the start of FY12. Carmakers have capitalized on the healthy demand trend and raised prices within a month of product launch.
For example, the price of Mahindra Thar has gone up by ₹300,000 since its launch 14 months ago. From ₹9.8 Lakh in October 2020, the base variant of Thar gets priced around ₹12.8 Lakh.
Similarly, the models which do not enjoy large quantities have seen a slight increase in their prices. For example, Tata Motors has raised the price of Safari by only ₹30,000 to ₹14.99 lakh since its launch in February.
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