Festive sales to lift auto dealer volumes by 10-15%: Crisil

Fuel prices, third wave are risks: Crisil

Bodyguard Muniswaran temple at Park Town in Chennai is where people take their new vehicle for blessing. If the number of new vehicles that come to the temple these days for puja are any indication, auto sales is clearly recovering post-covid. The scene at the temple on Thursday. Photo : Bijoy Ghosh

Festive season sales and pent-up demand along with new offerings are expected to push automobile dealers’ volumes up by 10-15% in FY22, even as they see a patchy recovery this fiscal, according to a survey by credit ratings agency Crisil.

However, a possible third wave of COVID-19, spurt in fuel prices and supply constraints of original equipment manufacturers (OEMs) are seen among factors that could slow the sector down, Crisil said on Monday.

Also, the performance of the dealers varies sharply from region to region with the dealerships in north India being impacted the most, the agency said.

“Last fiscal did see a demand uptick during the festival season, but it did not sustain. This fiscal, too, sales across segments are yet to reach pre-pandemic levels,” Crisil said.

“Also, the deal conversion cycle has doubled, with customers deferring purchase decisions,” said director Bhushan Parekh.