NEW DELHI: It is highly unlikely that 2-wheelers sales will reach to its previous high or even to pre-covid level any time soon, FADA (Federation of Automobile Dealers Associations) president Vinkesh Gulati told TNIE.
Facing increased ownership cost, high petrol prices and prolonged rural distress, 2-wheelers sales in recent months has come down to around 10 lakh level as against 13-14 lakh units sold per month in the pre-covid era. “We were expecting a year-on-year decline of 5-6% in February 2022 but it fell over 10%. There is no hope left for the industry unless some external forces such as GST rate cut or economic boom happens,” said Gulati.
He added that post-state election results, fuel prices will go up by at least `10-15 a litre as crude has breached the $110 mark. This will be a big obstacle for 2W sales. He added for the industry to reach the pre-covid level, electric vehicles (EVs) will have to play a big role. Many analysts also feel that the best days for petrol-run 2Ws are probably over as prospective buyers have started thinking about owning an EV due to a low running cost. Gulati also feels that the demand seen in the year 2017-18 can come on the back of EVs but it will take a long time.
“We are making just 40-50K EVs . I don’t think companies like Ola Electric that brags about producing in large numbers can deliver. They are doing just 4K vehicles now,” said Gulati. He added, “Once e-2W production capacity reaches 5 lakh units per month and the products are available all over India, 2W sales can reach to pre-covid level. For this to happen, all the 4 big companies will have to play a major role and not just tease products or produce in limited quantities.”
Fada on Friday also released February 2022 numbers in which total retail auto sales fell 9% to 13.74 lakhs. 2W sales fell 11% to 9.83 lakh units while passenger vehicle (PV) sales fell 8% to 2.38 lakh units. Fada said that the Russia-Ukraine conflict will have ripple effects on the global automobile supply chain as Russia is a large producer of Palladium, which is an essential metal for semi-conductors.
Ukraine on the other hand is one of the biggest producers and exporters of Neon Gas, which is also used in the manufacturing of semiconductors. “Due to the ongoing war, we once again fear the shortage in semi-conductors, which will create additional supply side issues for passenger vehicles,” said FADA.
