Auto Sector - Supply Restricting PV Growth, Subdued Demand In Two-Wheelers, Commercial Vehicles: Systematix
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Systematix Research Report
Demand momentum in the passenger vehicle segment remains strong; however, supply constraints due to the global semi-conductor shortage is leading to a waiting period of two to two and half months, restricting retail sales and causing a YoY decline in the festive season.
Unlike a sharp recovery last year post the easing of the Covid-19-led lockdowns, two-wheeler demand remained muted in H1 FY22 due to the impact of the second wave on hinterlands, price hikes owing to commodity cost inflation and all-time high fuel prices.
Our channel checks suggest that demand was weak on festive days and retail sales were 25-30% lower YoY despite discounts (Honda two-wheeler discounts up two times YoY) and retail financing schemes offered by original equipment manufacturers.
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