of restrictions due to the rise in Covid cases is expected to impact demand for
automobiles, especially for passenger vehicles and two-wheeler, according to
ratings agency Acuite.
sales recorded a contraction of 7 per cent YoY during December 2021 driven by
persistent global shortage of semiconductors and a longer waiting period for
many models, as per the ratings agency. On sequential basis too, sales declined
marginally, thereby highlighting weakness in demand.
The shortage of
semiconductors may continue to disrupt passenger vehicle production and
despatches over the next few months. For two-wheelers, Acuite
said it expects a recovery in sales in the near term due to the seasonal rise
in farm incomes. However, the fresh rise in Covid cases triggered by the
emergence of new variant Omicron across the country may delay the revival. For
commercial vehicles, it is bullish as infrastructure creation and construction
activities are gaining momentum in the core sectors. Outlook for the CV segment
is positive for the medium term.