- 2022 expected to be a neutral year due to the rise of the Omicron variant
- Industry is likely to fully recover only by 2023
The auto industry has been significantly affected by the COVID-19 (Coronavirus) pandemic. Car sales had been bleak in 2020 due to lockdown restrictions in various parts of the country. As the industry limped back to normalcy towards the end of the year, the industry witnessed steady growth in sales in Q4 of FY’2020-21. However, the car sales took a setback once again around the start of FY’2021-22 due to the second wave of COVID-19.
Additionally, the global shortage of semiconductors and the new Omicron variant of the novel coronavirus has once again pulled brakes on car sales in India. Moreover, these issues are expected to spill over to 2022. Speaking on the occasion, Vinkesh Gulati, President, Federation of Automobile Dealers Associations (FADA), said, “We see year 2022 as a neutral year as the rise of Omicron has once again created fear globally. This may further impact the supply in passenger vehicles if chip making countries go under lockdown or prioritise chip making for electronics used for ‘work from home’. We anticipate that H2 of CY 2022 may see supply as well as demand slowly coming back to normalcy. As mentioned earlier, Auto Industry may fully recover only by 2023 and come back to its pre-COVID levels if COVID becomes a history.”
That said, the automakers in the country are actively working towards improving the supply of semiconductors. Considering the volatile market conditions, car sales in the country is expected to witness a gradual growth in sales over a period of time.
