19 Aug 2022
Insight into the Automotive industry and its challenges
The word automotive is for motorized vehicles. The automotive industry in India is the fourth largest in the world as per 2021 data. As per FADA (Federation of Automobile Dealers Associations), India has over 15,000 Automotive dealers having 26,500 dealerships including multiple Associations of Automobile Dealers at the Regional, State, and City levels. Automotive dealers are into the sale, service, and spares of 2/3 Wheelers, Passenger Cars, UVs, Commercial Vehicles (including buses and trucks), and Tractors. This industry is employing approx. 4 million people in various sales and service centers.
Vehicle registrations with regional transport offices (RTO) increased 37% to 1,627,975 units in April, as per data collected by FADA. However, vehicle retails are yet to keep the levels seen in the pre-covid month of April 2019. Retail sales of PV and tractors grew by 12% (to 264,342 units) and 30% (to 48,319 units) when compared to April 2019. Registrations of two-wheelers, three-wheelers and commercial vehicles are yet to turn green as these categories were down by -11% (to 11,94,520 units), -13% (to 42,396 units) and -0.5% (to 78,398 units), respectively.
The two-wheeler segment is very sensitive to price hikes and continues to remain below pre-covid levels. Apart from rural distress, multiple price hikes due to BSVI emission norms coupled with high fuel prices are keeping the two-wheeler customers away. They may be benefited from some pent-up demand and the wedding season in the first two months of the financial year. People returning to offices and reopening educational institutions post COVID are also helping Two-wheeler sales this year.
Even with the high demand in the passenger vehicle sector, the customer will continue to witness long waiting periods. The reason is the shortage of semiconductor chips, high metal prices, and container shortages globally.
In today’s world, everything is getting digitalized and online. Vehicle dealers should also provide digestible information in various formats like VR (virtual reality) test drives, review videos, online configurators, etc to build a successful relationship with the customer.
PPG Industrial Estate situated in Delhi and Delhi NCR hosts automotive and vehicle companies. They deal in vehicle spare parts. Nowadays, with various economic options available for the materials of the vehicle body, high-level designing, and digitalization of marketing, there is healthy competition globally for the vehicle sector.