Indian car dealers on Monday warned of possible disruptions to supplies or shipments in the near term as the Middle East conflict pushed up the cost of raw materials even as total sales for the fiscal year hit a record high.
The overall operating environment is clouded by the conflict, the Federation of Automobile Dealers Associations (FADA) said in a statement.
The war has led to rising oil and gas prices, increasing fuel and logistics costs across the auto supply chain, while driving up prices of key metals such as aluminum, copper and steel used in vehicle manufacturing.
Last week, India’s biggest carmaker, Maruti Suzuki, said it would likely raise prices as the dispute pushed up the cost of raw materials.
An FADA survey found that more than half of dealers have experienced some form of supply or delivery disruption related to the ongoing dispute, with 17.1% reporting significant delays of three weeks or more.
Regarding fuel prices, 36.5% of retailers reported that the increase in pump prices moderately to significantly affects customers’ purchasing decisions, the federation added.
While the impact is more marked in the commercial vehicle segment, passenger vehicle and two-wheeler dealers have also reported selective delays depending on model variants.
Retail automobile sales in India grew by 25.28% in March, the association said.
Sales of passenger vehicles increased by 21.48% year-on-year in March, while those of two-wheelers jumped by 28.68% and those of utility vehicles by 15.12%. The financial year thus ended on a solid note, driven by the dynamics of tax reductions which improved purchasing power, according to the FADA.
Total retail sales for the fiscal year increased 13.3%.
FADA also reported that passenger vehicle inventories, the average time a car spends in showrooms, fell for the sixth consecutive month, standing at around 28 days in March, compared to 52 days in March of the previous year.
