Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Global semiconductor shortage has resulted in longer period for passenger vehicle deliveries, affecting sales in India by almost 20pc in March. Rising auto prices on the back of higher metal prices has also resulted to be a bane for auto sector, said Federation of Automobile Dealers Association (FADA).


Auto registrations in March fell 28pc from the prior year but is up 10.05pc from a month ago, according to FADA data. The agency noticed that registrations in March dipped over the prior year despite seven days of lockdown the previous year.


Passenger vehicles and tractor segments were the only two segments that witnessed a double-digit growth on the back of low base year as a result of transition from BS-IV to BS-VI and the lockdown.


FADA said that global shortage of semiconductors has resulted in a seven-month waiting period for passenger vehicle sales. Around 47pc of the dealers have lost more than 20pc sales due to the supply side constraints.


Tractor sales have sustained its upward trajectory on the back of good Rabi harvest and improved rural incomes. Normal monsoon has been forecast for India for the third straight year, which will result in tractor segment to perform well in the current fiscal, FADA noted.


Three-wheeler market is shifting from internal combustion engine to electric vehicles. Poor incomes during the tough pandemic period has resulted in the lower income category not being able to afford new vehicles.


Commercial vehicles segment also weakened from the prior year as it continues to suffer amid the ongoing pandemic.


Upcoming marriage season and festivities in India in April usually boost registrations but with the resurgence of COVID-19 may hinder growth and recovery of the auto sector. Maharashtra is a major consumer of automobiles accounting to 10-11p, but the current lockdown will affect overall sales for April. . 

SegmentMar-21Mar-20Pc Change
Passenger Vehicle27,9745217,87928%
Commercial Vehicle67,372116,559-42%


ICRA’s forecast


ICRA’s outlook for auto sector is 22-25pc for FY22 against prior year only on the back of low base year owing to effects of pandemic induced lockdown. Consumer sentiments is one of the key indicators for purchases such as cars and luxury goods, it noted. Demand has remained strong post the festive seasons for retail and wholesale dispatches. The V-shaped economic recovery aided consumer sentiments and consumption has improved significantly since June 2020 quarter.



Leave a Reply

Your email address will not be published.