In some disappointing news for the automobile enthusiasts, this festive season gave our car market the worst Diwali in almost a decade. This was not expected as lives seem to have been coming back on track slowly but surely. After mid-2021 was washed away by the lockdown, the festive season was the only hope. The automobile industry did see some healthy growth which was a clear sign of revival, but it turns out that it wasn’t too strong. The market remained around 75-80% of what it was at the same time last year. Also important to notice here, last year numbers were already heavily influenced by the pandemic and were not close to the usual. To have even lesser sales than last year really sums up the condition of the automobile industry.
Reasons For The Worst Diwali For Car Market
While the pandemic continues to be the major reason for people not having enough financial freedom to buy new cars, there were other factors at play. For instance, the shortage of semiconductors globally is another major reason why even the pent up demand was not fulfilled. This issue came to the fore at the end of last year. Many carmakers had mentioned that the production of automobiles will be hampered if the semiconductor issue was not resolved at the earliest. The countries with semiconductor manufacturing were hit by the pandemic in a big way. The limited production was directed to home appliances and mobiles and tablets which saw a huge boost during the lockdown as everything turned online.
The automobile industry was not the priority for the semiconductor companies. Hence, this issue plagued vehicle manufacturing globally. Mahindra openly announced that there were long waiting periods on the Thar primarily because of the shortage of semiconductors. Also, the launch of the popular XUV700 saw a huge delay due to the same reason. Now, Scorpio is the latest victim of this issue. Many other carmakers announced low sales figures for some months in between due to this problem as well. Therefore, while we can largely believe the pandemic to be the chief reason for this disappointing festive season, the semiconductor issue will also have to be considered as the main reason for it.