The demand uptick seen during the festival season last fiscal has failed to sustain; most of the dealers said sales are not yet at fiscal 2020 levels. Deal conversion cycle has doubled as consumers are deferring purchase
Two wheeler dealers had hoped for quick demand revival; however, those expectations were belied as rural demand declined with the rapid spread of Covid 19 afflictions to hinterlands during the second wave
Regional disparity in sales growth; dealers in the north have been the most impacted across segments
The government’s tweaks in law permitted auto dealerships to register as MSMEs, which would help them get easy access to more credit avenues and various schemes; however, their awareness about the schemes is low
Lower inventory at dealerships across segments will quicken recovery and reduce inventory holding costs
Most of the dealers have introduced employee welfare measures such as insurance and vaccination drives supported by original equipment manufacturers (OEMs)
A majority are optimistic that sales will increase in fiscal 2022 on lower base; however, they are merely likely to hit fiscal 2020 levels
The factors that could derail the auto sector’s growth are a possible third wave, fuel price and supply constraints of OEMs
