PVs retail sales dip 5% in March: FADA

PVs retail sales dip 5% in March: FADA

New Delhi: Domestic passenger vehicle retail sales in March declined by 4.87 per cent to 2,71,358 units, as compared to the same month last year, automobile dealers' body FADA said on Tuesday.

According to the Federation of Automobile Dealers Associations (FADA), PV 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," FADA President Vinkesh Gulati noted.

The Russia-Ukraine war and China lockdown will further dent supplies and will hit vehicle deliveries, he added.

Two-wheeler sales declined by 4.02 per cent to 11,57,681 units last month, as compared to 12,06,191 units in the year-ago period.

"The two-wheeler segment was already a non performer due to rural distress. It saw further dampening due to rise in vehicle ownership cost coupled with rising fuel cost," Gulati stated.

Commercial vehicle sales were up 14.91 per cent to 77,938 units, as compared to 67,828 units in March last year.

Three-wheeler sales were also up 26.61 per cent to 48,284 units last month, as compared to 38,135 units in March 2021.

Total sales across categories, however, declined by 2.87 per cent to 16,19,181 units last month, as against 16,66,996 units in the same month last year.

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, FADA said.

According to FADA, the on-going Russia-Ukraine war and China lockdown is expected to hit supplies of critical components thereby impacting the revival of the domestic auto industry. Besides, 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," Gulati told reporters.

"The near-term outlook for the Indian auto industry continues to remain a challenge as the on-going Russia-Ukraine war and China lockdown 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," Gulati noted.

The passenger vehicle segment is expected to witness an impact due to the disruption in precious metals and neon gas supplies which originate from the war hit zone, he added.

It will further slow the supply of semiconductors thus making waiting periods longer for the PVs, Gulati said.

"Overall, FADA remains extremely cautious in terms of any recovery in sight until the Russia-Ukraine war and China lockdown comes to an end," he noted. 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 made Original Equipment Manufacturers (OEMs) increase the prices of their vehicles, he noted. While there is no dent in terms of demand in the passenger vehicle (PV) segment, it is definitely going to impact the two-wheeler segment, which is an extremely price sensitive market, Gulati said.

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