The fiscal year 2021 has been the worst nightmare of the Indian automotive industry as it has pushed the industry many years back. According to the latest data released by the Society of Indian Automobile Manufacturers (SIAM), the wholesale dispatches from OEMs to dealers stood at 18,615,588 units posting a decline of 13.6% in FY21 when compared to 21,545,551 units in FY20.
Kenichi Ayukawa, President, SIAM said, “Indian automobile industry continues to work hard, amidst the challenges of COVID second wave, to maximise production and sales, while ensuring the safety of its people, partners and customers. We would like to thank and compliment the Government for a massive nation-wide vaccination drive and also for allowing vaccination of our employees in the factory premises.”
“On the sales front, a deep structural slowdown in the industry even before the pandemic, combined with the impact of COVID-19 in 2020-21, has pushed all vehicle segments back by many years. Recovery from here will require time and efforts by all stakeholders. There is uncertainty in the value chain owing to semiconductors, lockdowns and raw material. In an environment of uncertainty, instead of trying to predict the future, we will all work hard to create it,” he added.
In terms of segment, only the passenger vehicle saw the lowest decline of 2.24% at 2,711,457 units in FY21 compared to 2,773,519 units in the same period last year. This is because there is a need for personal mobility due to fear of the virus, and new launches enticed customers to buy more.
| Segments | FY20 | FY21 | % Change |
| Passenger Vehicles | 27,73,519 | 27,11,457 | -2. |
| Commercial Vehicles | 7,17,593 | 5,68,559 | -21. |
| Three Wheelers | 6,37,065 | 2,16,197 | -66. |
| Two Wheelers | 1,74,16,432 | 1,51,19,387 | -13. |
| Quadricycle | 942 | -12 | -101. |
| Total | 2,15,45,551 | 1,86,15,588 | --13.60 |
The worst affected segment was three-wheelers as it posted a steep decline of 66.06% at 2,16,197 units when compared to 6,37,065 units. According to ICRA, the decline is due to the structural change happening in the segment. As the cargo segment of three-wheelers is now moving towards electric vehicles, the passenger segment is seeing a decline because of fear of COVID-19 people using fewer three-wheelers.
Similarly, COVID-19 induced slowdown has pushed many middle-class families to lower middle-class families; people are now conserving cash and drastically reducing their disposable income, which affected the two-wheeler sales. The two-wheeler sales in FY21 declined by 13.19% at 15,119,387 units compared to 17,416,432 units in the same period last fiscal year.
On the commercial vehicle side, the segment posted a decline of -20.77% at 216,197 units in FY21 compared to 637,065 units in FY20. The commercial vehicle industry has been going through a rough patch even before COVID-19 because of axle norms and overall slowdown.