Festive-season sales and pent-up demand, along with new launches, are expected to push automobile dealers’ volumes up by 10-15 per cent in FY22, even as they see a patchy recovery in this financial year, 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) were seen among factors that could slow the sector down, CRISIL said on Monday. Besides, the performance of the automobile dealers varied sharply from region to region with the dealerships in north India being impacted the most, it said. 

“Dealers of two-wheelers, passenger vehicles and commercial vehicles expect sales to increase 10-15 per cent this financial year on a low base of last financial year, driven by new model launches, pent-up demand and festive-season sales,” the survey revealed. 

The survey, carried over 123 dealers of two-wheelers and passenger and commercial vehicles with a fair mix across regions and OEMs, was aimed at gauging dealers’ sentiment and expectations and drawing a comparison with the findings of the poll conducted with the previous year’s poll, CRISIL said. 

“Last financial year did see a demand uptick during the festival season, but it did not sustain. Two-wheeler dealers were the most impacted. This financial year too, sales across segments are yet to reach pre-pandemic levels. Also, the deal-conversion cycle has doubled, with customers deferring purchase decisions. While sentiment is positive among dealers, the risk of a third wave during the upcoming festive season is a key concern,” said Bhushan Parekh, a director of CRISIL.