The Federation of Automobile Dealers Associations (FADA) on Friday said that till the time Russia – Ukraine conflict doesn’t come to an end, FADA changes its outlook from ‘neutral’ to ‘negative’.

Russia is one of the largest producers of rare-earth metals especially palladium, which is an essential metal for semi-conductors. Ukraine on the other hand is one of the biggest producers and exporter of neon gas, which is used in the manufacturing of semiconductors, it said.

“Due the ongoing war, we once again fear the shortage in semiconductors which will create additional supply side issues for passenger vehicles (PVs). With crude breaching $110 mark, the government will not be able to hold prices of petroleum products for long. Post State election results, oil marketing companies will increase fuel prices by at least ₹10-15,” Vinkesh Gulati, President, FADA, said in a statement.

While this will act as an obstacle for two-wheeler (2W) sales, the opening up of educational institutions and offices and Gudi Padwa round the corner, the industry may see some increased interest in two-wheeler as well as the bus segment (which has witnessed a long dry spell of almost two years), he said.

Retail sales down

The Indian auto industry during February continues to remain in red as total retails were down by more than 9 per cent year-on-year (y-o-y).

In the PV segment, FADA reported that sales were down by 8 per cent y-o-y to 2,38,096 units during February as against 2,58,337 units in February last year.

Similarly, in the two-wheeler segment, the sales declined by 11 per cent y-o-y to 9,83,358 units during the month as against 11,00,754 units in February 2021.

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Tractor sales also declined by 19 per cent y-o-y to 50,304 units in February as against 62,004 units in same month last year, the FADA data said.

However, in the commercial vehicle (CV) segment, the sales grew by more than 7 per cent to 63,797 units in February as compared with 59,395 units in corresponding month last year.

Three-wheeler sales also grew by 17 per cent to 38,961 units last month as compared with 33,404 units in February 2021.