Russia-Ukraine war hits Indian Auto Retail sector with semiconductor crunch

New Delhi, March 4 (KNN) The ongoing Russia – Ukraine war has brought a new set of challenges for Indian Auto Retail as shortage of raw materials for semiconductor will disrupt supplies and crude breaching USD 110 mark will act as a hindrance on customer sentiment, said the Federation of Automobile Dealers Associations (FADA).

The federation has released its Vehicle Retail Data for February 2022 stating that the industry’s retail has continued to remain down during the month of February as total retails were down by -9.21 per cent YoY and -20.65 per cent when compared to pre-covid month, February 2020

On YoY basis, 3W and CV were up by 16.64 per cent and 7.41 per cent, while 2W, PV and tractors fell by   -10.67 per cent, -7.84 per cent and -18.87 per cent respectively.

As per the data, 2-Wheeler category continuous to face the brunt of rural distress and high cost of ownership while demand for PV continues to remain strong, the segment is still facing the heat of semiconductor shortage thus impacting supplies.

Commenting on how February’22 performed, FADA President, Vinkesh Gulati said, “The 2-wheeler segment is showing no signs of recovery as Bharat continues to play spoil-sport. With cost of acquisition continuously going north, inquiry level remained weak. As corporates and educational institutions continued operating from home, urban demand also took a hit.”

“While commercial vehicles are not at similar levels when compared to pre-covid months, slight recovery on yearly basis was visible majorly due to low base effect. This coupled with increase in government’s infrastructure spending saw continued traction in HCV and Tipper segments. Fleet operators who were earlier being missed have slowly started purchasing vehicles,” he added. (KNN Bureau)