‘The immediate challenge for the industry in most segments is semiconductor availability’
‘The immediate challenge for the industry in most segments is semiconductor availability’
Affected by supply-side challenges, total auto sales fell 6% across all segments last fiscal year, dragged down by lower two-wheeler and entry-level car sales amid rising vehicle and fuel costs, according to the Society of Indian Automobile Manufacturers (SIAM) .
According to data released by the industry association, sales of two-wheelers fell 11% to 1,34,66,412 units, sales of scooters fell 10.55% to 40,09,076 units and sales of motorcycles fell 10.3% to 89,84,186 units. In March, sales of two-wheelers fell 21% to 11,84,210 units, while sales of motorcycles and scooters fell 21% to 7,86,479 units and 3,60,082 units respectively.
Year-to-date, passenger car sales in 2021-22 totaled 30,69,499 units, up 13% from 27,11,457 units last year, mainly due to a 40% growth in commercial vehicle sales. However, in March 2022 sales fell by 4% to 2,79,501 units.
“Despite some recovery from a low base, sales in all four segments of the auto industry are even below 2018-19 levels,” said Kenichi Ayukawa, President of SIAM. “While some segments like commercial vehicles and SUVs are seeing an improvement in demand, the high-volume segments like two-wheelers and smaller cars face serious affordability issues.”
He added that the immediate challenge for the industry in most segments is semiconductor availability.
Rajesh Menon, Director General of SIAM added that all segments are facing supply-side challenges and the industry is yet to see a full recovery from the disruptions it has faced since early 2020. “Cars, commercial vehicles and three-wheelers have all posted growth in 2020-21 compared to a low industry base, but the two-wheeler segments continued to decline by (-)11% yoy,” he noted.
Commercial vehicle sales rose 26% last year to 7,16,566 units, while tricycle sales rose nearly 19% to 2,60,995 units.
On the outlook for the current year, Mr. Ayukawa added that the prevailing uncertainties and challenges make it difficult to make predictions, but supply issues related to electronic components will continue to affect production.
Mr. Menon added that sharp rises in commodity prices such as aluminum, copper, zinc, nickel and steel along with rising freight costs are also challenging the industry.
Asked about government support to boost sales, especially of two-wheelers and entry-level cars, Mr Ayukawa said the priority for now should be on the overall economic recovery as “we expect some support on the tax side for motorcycles and small cars”.
