New Delhi
Care Ratings, a
credit rating agency, stated that passenger vehicle (PV) makers in India could
expect a faster turnaround in sales when compared to two-wheeler makers.
The agency
explained that the demand for PVs wasn't affected as it was used by high-income
groups that are comparatively less affected by the ongoing COVID-19 pandemic,
whereas the demand for two-wheelers suffered due to its high dependency on the
rural segment.
On a
year-on-year (YoY) basis, wholesale of two-wheelers grew by 4% but PV
dispatches improved by 119%.
Analysts noted
that in comparison with June 2020, there was healthy growth across all
segments, except three-wheelers. But, when compared with June 2019, the demand
hadn’t reached pre-COVID levels for two-wheelers, three-wheelers and commercial
vehicles.
The agency added
that Q1FY22 saw 32 fuel price hikes done by Oil Marketing Companies (OMCs)
which weakened the already low consumer sentiment to buy a new vehicle. When
compared with Q1FY19 only tractors had performed well. It shows that tractor demand and sales hadn’t been affected
by the COVID-19 pandemic.
When sharing his
views on the upcoming challenges for the auto industry Kenichi Ayukawa,
President of SIAM said that a significant increase in commodity prices, a
global shortage of semiconductors and the fear of the third COVID-19 wave were
the major hurdles.
The fear of a
third wave creates uncertainties for a full recovery in FY22. Care Ratings
noted that the automobile industry depends a lot on the movement of people and
the opening of the economy. So, increasing the pace of vaccinations should be a
priority for the government.
Source – Mint
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