Automobiles sales skid 6% in 2021-22: SIAM

‘Direct challenge for industry in most segments is the availability of semiconductors’

‘Direct challenge for industry in most segments is the availability of semiconductors’

Impacted by supply-side challenges, total auto shipments declined 6% in all segments in the past fiscal year, according to the Society of Indian Automobile, driven in part by lower sales of two-wheeler and entry-level vehicles amid rising vehicle and fuel costs. Manufacturers (SIAM).

According to data released by the industry association, two-wheeler sales fell 11% to 1,346,412 units, with scooter sales falling 10.55% to 40,09,076 units and motorcycle sales down 10.3% fell to 89,84,186 units. In March, two-wheeler sales fell 21% to 11,84,210 units, while motorcycle and scooter sales fell 21% to 7,86,479 units and 3,60,082 units, respectively.

During the year, passenger car sales in 2021-22 were 30,69,499 units, up 13% from 27,11,457 units a year ago, mainly due to 40% growth in commercial vehicle sales. However, in March 2022, sales fell 4% to 2,79,501 units.

“Despite some recovery from low bases, sales of all four segments of the auto industry are even below 2018-19 levels,” said Kenichi Ayukawa, president of SIAM. “While some segments such as commercial vehicles and SUVs are seeing an improvement in demand, the mass segments such as two-wheelers and smaller cars are facing serious affordability issues.”

He added that the immediate challenge for the industry in most segments is the availability of semiconductors.

Rajesh Menon, director general of SIAM, added that all segments are facing supply-side challenges and the sector has not yet seen a full recovery from the disruptions it has faced since early 2020. “Passenger vehicles, commercial vehicles and tricycles have witnessed growth compared to an industry low in 2020-21, but the two-wheeler segments continued to decline (-) 11% from the prior year,” he noted.

Commercial vehicle sales grew 26% last year to 7,16,566 units, while tricycle sales grew nearly 19% to 2,60,995 units.

Turning to the outlook for the current year, Mr. Ayukawa added that it is difficult to make predictions due to the prevailing uncertainties and challenges, but supply issues related to electronic components will continue to affect production.

Mr Menon added that a surge 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 for two-wheelers and entry-level cars, Mr Ayukawa said the priority should now be on general economic recovery, after saying that “we expect some fiscal support for motorcycles and small cars” .

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