Small cars, two-wheelers facing ‘affordability issues’, SIAM data shows pain
The Indian automobile industry continued to feel the pain the month of March with the domestic sales of two-wheelers and passenger vehicles falling vis-a-vis March of 2021 and remaining alarmingly lower than the pre-pandemic March month of 2019. Latest data revealed by Society of Indian Automobile Manufacturers (SIAM) shows that while exports are up, performance across almost every automobile segment in the domestic market remains firmly in the red.
A total of 2.79 lakh passenger vehicles were sold in the domestic market last month, down from 2.90 lakh in 2021. This despite utility vehicles faring stronger and because of a sharper dip in sales of other categories of passenger vehicles, especially smaller cars. The decline in the two-wheeler segment is even more sharp with 11.84 lakh units sold last month, down from 14.96 lakh in 2021. “Despite some recovery from a low base, sales of all four segments of the auto industry are below even 2018-19 level. While some segments like Commercial Vehicles and SUVs are seeing improvement in demand, the mass segments like two-wheelers and smaller cars are facing serious affordability issues.," noted Kenichi Ayukawa, SIAM President. "Ofcourse, our immediate challenge in most segments is semiconductor availability."
The semiconductor issue has been persisting as a major stumbling block for the global automotive industry but factors like the Covid-19 pandemic and supply-side issues - possibly also increased by the Russia-Ukraine conflict - have further complicated matters. What is also possibly harming prospects is the rising cost of fuel and increasing input costs which have compelled several manufactures to hike prices. “Overall Industry witnessed a de-growth of (-) 6% in FY22. All segments are facing supply side challenges and the industry is yet to see complete recovery following the disruptions it has been facing since early 2020," highlighted Rajesh Menon, Director General, SIAM. "