Automotive dealer body Federation of Automobile Dealers Associations (FADA) on Wednesday warned that an increase in the number of Omicron cases might cause supply chain disruption in the passenger vehicles segment adding that 2022 could be a neutral year.
“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’, said President Vinkesh Gulati, FADA in a statement.
Based on current trends, the automobile dealers’ association also anticipated that the demand supply mismatch that is currently afflicting the sector could normalise only by the second half of the financial year. However, that may come to a nought incase of a tidal third wave particularly for the two wheeler segment.
“Auto Industry may fully recover only by 2023 and come back to its pre-covid levels if covid becomes a history”, Gulati added.
The industry produced 14,647,842 units in the first 8 months of this fiscal which was over 11% more than in the same period of fiscal 2021 but still lower than 18,356,431 units that were produced in the first 8 months of pre pandemic fiscal 2020.
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Talking about the near term outlook, Gulati said that the new variant of Covid ‘Omicron’ has once again gripped the entire nation in fear, which will further impact the overall vehicle demand. Educational Institutions and offices which were planning to reopen fully have once again deferred their plans and are allowing work/study from home. Price rise due to high input costs and high fuel costs are continuing to add to customers’ woes.