India Ratings and Research (Ind-Ra) lowered India’s auto sales growth to 12-16pc from an initial growth rate of 16-20pc in FY2022 compared to the previous fiscal.
The agency’s initial rationale for auto sales growth included the revival in demand across all segments which was expected to continue in the second half of the current fiscal aided by a recovery in consumer sentiments. Factors such as preference for personal mobility and macroeconomic tailwinds also support the forecast.
The downward revision is mainly on account of a revision in the growth forecasts for two-wheelers and passenger vehicles to 10-14pc while the initial estimate was 16-20pc and to 15-18pc, respectively, while the initial estimation was 18-22pc, respectively. The growth forecast for commercial vehicles is maintained at 20-25pc for FY2022.
Two-wheeler sales volumes are expected to slide mainly due to reduced disposable income, especially of the buyers of entry-level segment, amid the widespread impact of the second wave of COVID-19. The deferral in the re-opening of colleges and workspaces has also limited travel and thereby impact sales of this segment.
While the demand fundamentals for PVs remain strong, according to the report, growth would, however, be constrained by supply chain challenges with a shortage of semiconductors. CVs could record high double-digit growth in FY2022 with export orders marginally increasing and faring better than domestic sales in FY2022.