Mumbai: Even as the demand for passenger vehicles remained strong during the month of March, its sales dropped by 4.87 per cent to 2,71,358 units as compared to the corresponding period last year, mainly on the back of supply crunch due to various global phenomena, a recent report by automobiles dealers' body Federation of Automobile Dealers Associations (FADA) said.
Passenger vehicle sales stood at 2,85,240 units in March 2021.
"Passenger vehicles continue to see high demand and long waiting periods as semiconductor availability still remains a challenge even though supplies slightly improved from previous month. The Russia-Ukraine war and China lockdown will further dent supplies and hence press brakes on vehicle availability thus making the waiting period more frustrating for customers," FADA President Vinkesh Gulati said.
Total vehicle retail dropped by nearly three per cent during the month to 16,19,181 units as compared to 16,66,996 units sold in March 2021.
"Indian auto industry during March tried its best to be at par year-on-year but fell short by three per cent and 30 per cent when compared to March 2020, a month which saw BS4 to BS6 transition," he said.
During the month, sales of 3-wheelers and commercial vehicles were up by 27 per cent and 15 per cent, respectively to 48,284 units and 77,938 units.
However, the sales of 2-wheeler and tractors fell by four per cent and eight per cent respectively to 11,57,681 units and 63,920 units during March 2022.
"The 2W segment which was already a non-performer due to rural distress, saw further dampening due to rise in vehicle ownership cost coupled with rising fuel cost," Gulati said.
He further said that the 3W segment was witnessing a shrinkage in market size due to permit issues, educational institutions being closed and work from home phenomenon.
"With India now completely opening up, the segment is seeing strong double digit growth when compared to YoY. EVs are now contributing over 45 per cent market share in this segment. There is also good demand for load vehicles from captive customers," Gulati added.
He further noted that the near term outlook for the Indian auto industry continues to remain a challenge as the on-going Russia-Ukraine war and China lock down does not hint towards a smooth path.
"Crude is on a boil and hence fuel prices have been raised by around Rs 10. This will continue to rise and further hit sentiments on lowering the spending. Along with this, increase in raw material costs have made OEMs increase the prices of their vehicles," Gulati said.
While no dent in terms of demand has been seen in the PV segment, it will definitely have its impact on the 2W segment, which is an extremely price sensitive market, he added. (UNI)