Automobile dealers in India are warning of potential disruptions in the supply and distribution of vehicles at a time when the sector is facing increasing pressures due to the conflict in the Middle East.
Costs rise and supply chain feels the impact
According to the Federation of Automobile Dealers Associations (FADA), the rising prices of oil and gas are significantly increasing fuel and logistics costs across the automotive chain.
The pressure also extends to raw materials, with essential metals like aluminum, copper, and steel experiencing price increases, raising the cost of vehicle production.
Delays are already starting to appear
A survey conducted by FADA reveals that more than half of the dealers have already reported some type of disruption in the supply or delivery of vehicles.
About 17.1% of respondents reported significant delays of more than three weeks, while others pointed to sporadic failures in certain models or versions.
Fuel prices influence purchasing decisions
The increase in energy costs is also beginning to reflect in consumer behavior. More than a third of dealers indicate that fuel prices are affecting customers' purchasing decisions to a moderate to significant extent.
The impact is most evident in the commercial vehicle segment, although it is also felt in passenger cars and two-wheelers.
Sales reach historic highs
Despite the challenges, the sector recorded solid performance at the end of the fiscal year. In March, retail sales grew by 25.28%, driven by measures such as tax cuts that increased accessibility.
By segment:
- Passenger vehicles: +21.48%
- Motorcycles: +28.68%
- Commercial vehicles: +15.12%
For the year-to-date, sales grew by 13.3%.
Stocks decrease and indicate higher demand
Another positive sign was the reduction in the average time vehicles spent at dealerships, which fell to about 28 days in March, compared to 52 days recorded in the same period last year.
Sector between growth and uncertainty
The Indian automotive market is thus going through a paradoxical moment: on one hand, it records record sales levels; on the other, it faces increasing risks associated with external factors such as geopolitical instability and rising costs.
The evolution of the conflict and energy prices will be decisive for the sector's performance in the coming months.