‘Immediate challenge for the industry in most segments is semiconductor availability’
‘Immediate challenge for the industry in most segments is semiconductor availability’
Impacted by supply-side challenges, total automobile dispatches during the last financial year fell 6% in all segments, dragged down by lower sales of two-wheelers and entry-level cars amid rising vehicle and fuel costs, according to the Society of Indian Automobile Manufacturers (SIAM).
As per the data released by the industry body, two-wheeler sales fell by 11% to 1,34,66,412 units with scooter sales falling 10.55% to 40,09,076 units and motorcycle sales dropping 10.3% to 89,84,186 units. In March, the two-wheeler sales nosedived 21% to 11,84,210 units as motorcycle and scooter sales declined by 21% each to 7,86,479 units and 3,60,082 units, respectively.
During the year, passenger vehicle sales during 2021-22 stood at 30,69,499 units, up 13% from 27,11,457 units a year ago, mainly driven by a 40% growth in sales of utility vehicles. In March 2022, however, the sales were down 4% to 2,79,501 units.
“Despite some recovery from a low base, sales of all four segments of the auto industry are below even the 2018-19 level,” Kenichi Ayukawa, President, SIAM said. “While some segments like Commercial Vehicles and SUVs are seeing improvement in demand, the mass segments like two-wheelers and smaller cars are facing serious affordability issues.”
He added that the immediate challenge for the industry in most segments is semiconductor availability.
Rajesh Menon, Director General, SIAM said, added that all segments are facing supply-side challenges and the industry is yet to see complete recovery following the disruptions it has been facing since early 2020. “Passenger Vehicles, Commercial Vehicles and Three-wheelers have witnessed a growth compared to a low base of the industry in 2020-21, but the Two-Wheeler segments further declined by (-) 11% from the previous year,” he noted.
Commercial Vehicles sales for the last year grew 26% to 7,16,566 units, while three-wheeler sales were up almost 19% to 2,60,995 units.
On the outlook for the current year, Mr Ayukawa added that it is difficult to give any predictions due to prevailing uncertainties and challenges, but supply issues related to electronic components will continue to impact production.
Mr. Menon added that a steep increase in commodity prices such as aluminium, copper, zinc, nickel and steel, along with rising freight costs also pose a challenge for the industry.
Asked about government support for pushing sales, particularly for two-wheelers and entry-level cars, Mr. Ayukawa said the priority right now should be of overall economic recovery, post that “we expect some support on the tax side for motorcycles and small cars”.
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