Retail auto sales fell 2.9% in March as FADA flags supply disruptions and country stress


The disruption in the supply chain as well as the plight of the rural economy are likely to hold back the revival of the auto sector, which is not expected to see a sharp turnaround until next fiscal year, the Federation of Automobile Dealers Associations (FADA) said.

Total retail sales in March fell 2.87% to 16,19,181 units, while full-year sales rose about 7% to 1,63,75,799, data from FADA showed.

“The near-term outlook for the Indian auto industry remains challenging as the ongoing war between Russia and Ukraine and the lockdown in China are expected to affect supply of critical components… We expect sales volumes to increase [in] in the single digits in the current fiscal year,” FADA President Vinkesh Gulati told reporters.

However, he added that the association expects the auto industry to be out of the woods, reaching pre-pandemic highs by FY24.

Last fiscal year, retail sales of passenger cars (PV) grew 14.2% to 27,26,047 units, while two-wheeler sales increased 3.81% to 1,19,73,415. “Crude oil is boiling and so fuel prices have been raised by around £10. This will continue to rise and continue to hit the mood,” added Mr. Gulati.

He said while the PV segment is likely to face longer wait times due to supply chain disruptions, the two-wheeler segment – already a “non-performer” due to rural hardship – could be further dampened by an increase in vehicle operating costs coupled with rising fuel costs.

“FADA remains extremely cautious about any recovery in sight until the Russia-Ukraine war and China lockdown come to an end,” Mr. Gulati said.

Last year, commercial vehicle sales increased by 45% to 6,52,125 units, while tricycle sales increased by 50.3% to 3,88,093 units.

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