The Federation of Automobile Dealers Associations (FADA) announced on March 4 that overall vehicle retail sales had fallen 9.21% year on year in February 2022 and 20.65% versus the same month in 2020.
Year on year, three-wheeler and commercial vehicle retail sales increased 16.64 percent and 7.41 percent respectively, whereas two-wheeler and passenger vehicle retail sales decreased 10.67 and 7.84 percent respectively. And, tractor retail sales fell 18.87 percent.
FADA president Vinkesh Gulati said in a statement, “The Indian auto industry during February continues to remain in red as total retail sales were down 9.21% year on year and 20.65% compared to February 2020, a regular pre-COVID month."
"As corporates and educational institutions continued operating from home, urban two-wheeler segment demand took a hit. Even though the PV (passenger vehicle) segment saw some launches and slight respite in supply due to better production, it was not enough to meet customer demand. Vehicle waiting period thus remains similar to what it was in last few months," he added.
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"While commercial vehicles are not at similar levels compared to pre-COVID months, slight recovery on a yearly basis was visible majorly due to low base effect. This coupled with increase in government’s infrastructure spending saw continued traction in HCV (heavy commercial vehicle) and tipper segments. Fleet operators who were earlier being missed have slowly started purchasing vehicles," Gulati said.
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FADA also said in its statement that when the Indian Auto Industry was on the verge of recovery, with Omicron also not showing its impact and supplies showing signs of revival, the Russia-Ukraine conflict acted as a spoilsport and that this will have repercussions in the global automobile supply chain once more.
Till the time Russia-Ukraine conflict doesn’t come to an end, FADA changes its outlook from ‘neutral’ to ‘negative’.
The statement further stated that Russia is a major producer of rare-earth metals, particularly palladium, which is required for semi-conductors. FADA has also said Ukraine is a major producer and exporter of neon gas, which is utilised in semiconductor fabrication. It has noted due to the current war, Indian auto industry is once again concerned about a scarcity of semi-conductors, which will post PV supply concerns.
The Automobile dealers' body also stated with crude breaching $110 mark, the government will not be able to hold prices of petroleum products for long, and predicted oil marketing companies will increase fuel prices by at least Rs. 10-15, post-state election results.
Also Read: Passenger vehicle wholesales dip 8% in January as semiconductor woes continue
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