Sharply rising fuel prices may impact near term PV demand across segments - Acuité Ratings

A moderate recovery in the domestic PV segment continued during Mar'22 as reflected by the domestic sales of top 13 PV players in the country. The total domestic sales of these players reported a growth of 2.8% YoY during the same period against Mar'21. The domestic sales of the top two market leaders i.e. MSIL and Hyundai however, continued to decline by 8.4% and 15.2% YoY respectively during Mar'22. Despite that, the domestic sales witnessed improvement led by healthy sales reported by other key players such as Tata Motors, M&M, Kia and Toyota which reported growth in domestic sales of 42.6%, 65.3%, 18.4% and 14.2% YoY respectively led by high demand in the SUV and compact SUV segment driven by new product launches and variants. On a sequential basis, the domestic PV sales recorded a growth of 6.5% MoM. For the whole financial year, the domestic sales registered a healthy growth of 14.7% YoY during FY22 as compared to FY21 despite the supply bottlenecks in semiconductors which led to longer waiting periods and production cuts for certain models. The growth print was also supported by a low base factor given the protracted lockdown in FY21.

Acuité believes that the demand for PVs will witness a moderate growth over the next few quarters with complete unlocking of the economy and revival of demand particularly in the rural areas. The volumes may remain partly constrained due to the continuing supply challenges in semiconductors and also the sharp increase in retail fuel prices.

Link to the report

Source : Equity Bulls

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PassengerVehicle FuelPriceRise DemandImpact AcuiteRatings