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Automakers Optimistic Over 2022, Omicron Ready to Ruin Party

  • Posted by Arun Dagar On 22-Dec-2021 10:35 AM

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The Indian Automotive industry is reeling from a disappointing 2021 in terms of sales as well as production numbers due to the various restrictions of the pandemic and its resulting aftermath which has shaken the Indian Auto Industry really hard.

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The Automakers in India were hoping for a turnaround in business during the festive period but that was also a huge let-down as the Automakers struggle to reach the pre-pandemic levels in terms of sales and production. Though there is still demand for some popular models but the ongoing semi-conductor chip-shortage has forced the vehicle manufacturers to reduce production and offer variants with less tech on offer to the willing customers. Due to all this the Carmakers are sitting on huge piles of backlog with more than 8 lakh customers waiting for deliveries of their cars.

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The auto manufacturers do feel buoyed by this response from the buyers but all this is due in parts to the pandemic and since ramping up production is not an option anymore the burden on the auto industry continues to grow. Still the auto majors are optimistic for 2022 due to the fact that the chip- shortage will start to ease up while the new year might bring in buyers to the showrooms, as there are slew of launches planned by the manufacturers in both 4-wheelers and two-wheelers and add on the electric revolution the next year does promise some cheer for them.

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In 2021 alone the auto market in India continued to decline with double digit de-growth registered for the past few months which dampened the mood in the festive period too but the continuous demand for the popular models combined with the response towards the new launches did help in sales even though they were not what the manufacturers wanted.
The state-wise lockdowns imposed during the year and the resultant supply chain disruptions did severe damage to the growth of the industry and when all was looking to come back to normal the rising commodity prices forced many manufacturers to announce price hikes in their line-ups and with many manufacturers already announcing price hikes from January 2022 the impact will be seen on the sales figures.

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How-ever the saving grace has been the favourable government schemes and incentives including the extension FAME-II till 2024 and incentive scheme for semi-conductor manufacturing in India over six years which offer a bright outlook for the future to the auto industry which desperately needs some assistance in rising from the impact of the pandemic.

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All this can how-ever be just positive thinking as the auto manufacturers may face another impact of the third wave of the virus due to the new and dangerous Omicron variant which is rapidly spreading all-over the world forcing many European nations into lockdowns again. In India we are yet to see the full effect of the Omicron variant but the subtle rise in cases every-day is not a good indication for the auto industry which is optimistic for the next year. What will happen in 2022 is to be seen but if the situation around the world is anything to go by then the next year may well be another challenge for the Indian Automakers.