‘AUTO INDUSTRY TO REACH PRE-COVID HIGHS BY FY24’

NEW DELHI: Supply chain disruptions and low demand across segments, especially two-wheelers, are expected to impact automobile retail sales in the current fiscal with the turnaround anticipated only in the next financial year, the Federation of Automobile Dealers Associations (FADA) said on Tuesday.

The on-going Russia-ukraine war and the lockdown in China is expected to hit supplies of critical components, thereby impacting the revival of domestic auto industry, FADA said.

Revival of demand in rural parts of the county would also have an impact on the overall growth of the industry in the current fiscal. “We expect the situation to remain challenging in the current fiscal with sales volumes expected to grow by single digit,” FADA president Vinkesh Gulati told reporters.

For the fiscal year ended 2021-22, total auto industry retail sales grew by 7.21% to 1,63,75,799 units, compared to 1,52,74,314 units in the last fiscal.

FADA anticipates the auto industry to come out of the woods and reach pre-pandemic highs by FY2024, Gulati said. Rise in raw material costs have pushed original equipment manufacturers to raise the prices of their vehicles, he noted.

There is no dent in terms of demand in the PV segment, but it is definitely going to impact the two-wheeler segment, which is an extremely price sensitive market, Gulati said.

In the last fiscal, PV retail sales witnessed a jump of 14.16% at 27,26,047 units, as against 23,87,925 units in 2020-21. Twowheeler retail sales stood at 1,19,73,415 units last fiscal, up 3.81% as compared to 1,15,33,928 units in 2020-21. Commercial vehicle sales saw a year-on-year growth of 45%, while threewheeler sales rose by 50.32% as compared to the 2020-21 fiscal.

Gulati said the increase in volumes across sectors in 2021-22 fiscal was on a low base of Covidhit 2020-21 financial year.

In March, overall automobile retails across categories declined by 2.87% year-on-year to 16,19,181 units.