Retail auto sales fell 2.9% in March, FADA flags supply disruptions, rural stress

Supply chain disruption, along with distress in the rural economy, is likely to slow the recovery of the auto sector, which is not expected to see a sharp turnaround until next financial year, according to the Federation of Automobile Dealers Associations (FADA).

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

“The near-term outlook for the Indian auto industry remains challenging as the ongoing war between Russia and Ukraine and the shutdown of China are expected to hit supplies of critical components… We expect sales volumes to grow [in] single digit in the current fiscal,” FADA president Vinkesh Gulati told reporters.

However, he added that the federation expected the auto industry to be out of the woods and reach pre-pandemic highs by FY24.

In the last fiscal year, retail sales of passenger cars (PV) were up 14.2% to 27,26,047 units, while two-wheeler sales rose 3.81% to 1,19,73,415. “The crude oil is boiling and therefore fuel prices have increased by about 10. This will continue to rise and hit sentiment further,” added Mr Gulati.

He said that while the PV segment is likely to experience longer wait times due to supply chain disruptions, the two-wheeler segment — already a ‘non-performer’ due to rural distress — could further decline as a result of a surge. cost of ownership of vehicles coupled with rising fuel costs.

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

Over the past year, commercial vehicle sales grew 45% to 6,52,125 units, while tricycle sales grew 50.3% to 3,88,093 units.

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