Kaniza Garari
The automobile industry is still reeling from the impact of Pandemic, Russia-Ukraine war and the lockdown in China according to a recent assessment by the Federation of Automobile Dealers Associations (FADA).
The data for April 2022 is compared to that of April 2019 and it is found that the market recovery in terms of retail sales will take time.
Federation of Automobile Dealers Associations observations for the Retail market are:
- Two-wheelers and three-wheelers vehicle category is down by minus 11 percent and minus 13 percent
- Commercial Vehicles category is down by 0.5 percent
- Private Vehicles and Tractors have grown handsomely by 12% and 30%.
The retail vehicle market has been impacted by the Reserve Bank of India’s repo rate and it has taken all off the guard.
FADA President, Mr. Vinkesh Gulati says, “The RBI move has taken the industry off guard. It will also apply brakes and dampen the sentiments further as the move curbs excess liquidity in the system. This will make auto loans expensive.”
FADA is comparing the present scenario with pre-Covid 19 times as that is a better benchmark. The market recovery was expected but internal economic factors within the country and external factors in terms of oil rates and also the technology are creating hurdles.
Mr Gulati says, “There is a prediction of normal monsoon by Skymet. We are positive that it will rub off rural sentiment whose performance in the last two years has been slow. Tractors and two-wheelers sales will improve if there is a good monsoon season.” In terms of the Russia-Ukraine war and China lockdown, there is expected to be a mismatch in terms of the availability of automobile segments.
This delay will add to the problems in the market and it will be resolved as and when the situation in these regions stabilizes.
