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India Car Sales Fall Over 30% Amid Chip Crunch, Rising Costs A Worry: SIAM

Sales of cars and utility vehicles fell for the second straight month in September amid a global semiconductor crunch.

<div class="paragraphs"><p>Toyota Showroom in Noida. (Photographer: Nishant Sharma/BloombergQuint)</p></div>
Toyota Showroom in Noida. (Photographer: Nishant Sharma/BloombergQuint)

Sales of cars and utility vehicles fell for the second straight month in September amid a global semiconductor crunch even as demand rises. Rising costs is another concern.

Domestic wholesales of passenger vehicles fell 30.7% month-on-month to 1.60 lakh units in September, according to data released by the Society of Indian Automobile Manufacturers on Thursday.

SIAM numbers for September 2021 (MoM)

  • Car sales fell 40% to 64,235 units.

  • Wholesales of utility vehicles fell 21.6% to 87,720 units.

  • Total two-wheeler sales rose 15% to 15.3 lakh units.

  • Three-wheeler sales increased 25.7% to 29,185 units.

The Indian auto industry was emerging from the second Covid wave disruption that had forced dealerships to remain closed and manufacturers to cut out. But a severe shortage of chips, the brains of electronic components inside cars, hit.

The semiconductor crisis that began last December worsened amid mounting infections in the key producer Malaysia. It is now hurting Indian automakers severely and even forced Maruti Suzuki India Ltd., India’s largest carmaker, to announce production cuts.

In September, Maruti estimated the output volume to be around 40% of the normal levels.

"While we're seeing a revival in vehicle demand, shortage of semi-conductor chips is causing a major concern for the industry," SIAM President Kenichi Ayukawa said in a statement.

High raw material prices, SIAM said, continue to be a challenge.