The reimposition 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.

Kumar Rakesh, senior automobile and technology analyst at BNP Paribas India, said that, raw material prices are stabilizing and price hikes would positively impact the margins of automakers.

Speed breakers such as the third COVID-19 wave triggered via the spread of the Omicron variant in India as well as rising commodity prices might decelerate the automobile industry's recovery.

India Ratings and Research (Ind-Ra) November 2021 report highlights the trends in the sub-segments of the auto sector, including passenger vehicles (PVs) and two/three-wheelers (2W/3Ws), focussing on sales volumes growth.

American auto component maker Dana has said that India offers huge opportunities for the company in the EV space and it continues to invest in all its facilities depending upon the demand.

India’s passenger vehicle industry is set to lose 500,000-600,000 units in production and more than $5 billion in revenue this fiscal year due to the global shortage of semiconductors, say industry executives.

The auto components industry is poised for a 10- 15 per cent growth in fiscal 2022, following a 3 per cent slide in FY21 during peak Covid pandemic, according to Sunjay Kapur.

With the ripple down effect of declining automobile sales, the forging industry is facing the heat with a sharp decline in demand.

The ongoing chip shortage is likely to moderate passenger vehicle sales growth to 11-13% this fiscal, down from the earlier volume growth forecast of 16-17 per cent, delaying the industry recovery as the waiting period is increasing amid strong demand due to production curbs, says a Crisil report.