Goodbye 2022: Key events that shaped the Indian auto industry this year

The Ukraine-Russia war and the repo rate hike by the Reserve Bank of India are among the key events that have shaped the course of the Indian auto ind
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The year 2022 has witnessed a lot of events that have influenced the Indian auto industry, directly or indirectly.
The year 2022 has witnessed a lot of events that have influenced the Indian auto industry, directly or indirectly.

The Indian auto industry is one of the largest in the world, and it is bulging every year with rising sales volume and an increasing number of vehicles. Being the apex manufacturing industry, the auto manufacturing sector is highly sensitive to many external factors that take place around us. The year 2022 was no different. Several factors and events that took place around the world have impacted the Indian auto industry, like the rest of the global automotive sector.

HT Auto has selected the top five major events in India and worldwide that have directly or indirectly shaped the course of the Indian auto industry in the year 2022.

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Ukraine-Russia war

The ongoing war between Ukraine and Russia has impacted the Indian auto industry just like the rest of the global auto sector. The conflict between these two countries has impacted the global automotive supply chain dearly. Ukraine and Russia play a crucial role in the global automotive supply chain. The auto component industry in Ukraine, along with the raw materials supply line for chip manufacturing, has been severely affected due to the Russian invasion.

On the other hand, the global economic sanction imposed on Russia owing to its invasion of Ukraine has impacted the crude oil supply chain and various auto component supply lines. As a result, the Indian auto sector has been facing difficulties in sourcing critical raw materials and automotive components that are necessary for manufacturing vehicles. This has resulted in increased prices for vehicles and prolonged waiting periods for car buyers as well, impacting the overall growth of the industry.

Cyrus Mistry's death

Former Tata Sons chairman Cyrus Mistry died in September 2022 in a car accident. The death of the man who was a key figure behind several Tata car projects has brought the issue of automotive safety to the front. Cyrus Mistry's tragic death triggered a fresh debate over road safety. It was found that Mistry and his co-passengers were riding in a high-end luxury car but weren't following basic safety protocols like fastening seatbelts.

Also, the car was found overspeeding, which was cited as another reason behind the crash. The Mercedes-Benz GLC was found to have covered a distance of 20 kilometres in just nine minutes, which means the luxury SUV was running at a speed of roughly 150 kmph. The bad road design was cited as another key reason behind this accident. As a result of this accident, the Ministry of Road Transport and Highway (MoRTH) made it mandatory for rear-seat passengers to wear seatbelts. Also, it ensured there would be an increased focus on better road designs.

Also Read : Cyrus Mistry death: International Road Federation finds faults at accident site

RBI hiked repo rate

The Reserve Bank of India (RBI) raised the repo rate four times in the current financial year, between April and December. The total repo rate hike in the current financial year, so far, has been 6.25 per cent. The last hike was announced by the country's apex bank on December 7. These multiple repo rate hikes resulted in the banks and other lending agencies like non-banking financial companies increasing car loan interest rates.

Consumers buying new vehicles will be impacted due to the increased interest rates of the RBI. Also, the consumers who already own a vehicle and pay EMI for that will be impacted by this move. The increased interest rate by banks and NBFCs will adversely impact the existing car loans that come with floater rates. This would also impact vehicle prices, as OEMs and auto parts manufacturers also take loans from lending agencies.

Also Read : Planning to buy a car on loan? You may have to shell out extra

EV policy launches

The year 2022 witnessed multiple state and union territories launching their respective electric vehicle policies. Uttar Pradesh and Punjab introduced their EV policies in 2022, while the union territory Ladakh introduced its own EV policy. The Uttar Pradesh EV policy envisages offering incentives to 50,000 electric vehicles over the next three years. The state government's EV policy aims to offer incentives to electric two-wheelers and three-wheelers as well as to the manufacturers.

Punjab EV policy drafted in 2022 aims for 25 per cent of total vehicle registrations in the state to be pure electric by 2027. Besides offering incentives to electric vehicle buyers, the Punjab EV policy also aims to bolster the manufacturing of components and batteries of BEVs. The Ladakh EV policy introduced in August this year offers incentives for electric vehicles across different segments of the industry, with an extent of up to 25 per cent. The policy aims to bolster the demand for EVs and the development of EV charging infrastructure in the region.

Also Read : Uttar Pradesh now has a new EV policy, blockbuster incentives for buyers

CNG and hybrid cars got a boost

The sky-high price of petrol and diesel has forced consumers to be more open about CNG and hybrid cars. Seeing an opportunity, automakers in the country introduced several models with factory-fitted CNG kits and hybrid powertrains. Auto manufacturers like Maruti Suzuki, Tata Motors, and Toyota remained at the forefront of the tide. Maruti Suzuki launched a total of seven CNG cars in 2022, while Tata and Toyota launched two and one model, respectively.

Maruti Suzuki launched the CNG versions of Baleno, Swift, Dzire, Alto K10, Celrio, S-Presso and XL6 in 2022. Tata Motors introduced the CNG variants of the Tiago and Tigor this year. Toyota, on the other hand, introduced the CNG variant of the Glanza premium hatchback, which is the rebadged iteration of the Maruti Suzuki Baleno. The Honda City, Toyota Urban Cruiser Hyryder, and Maruti Suzuki Grand Vitara came to India with hybrid technology in 2022. These hybrid cars come with localised production.

First Published Date: 25 Dec 2022, 09:33 AM IST
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