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Ratings agency ICRA in its latest report has revised downwards growth forecast for the domestic passenger vehicles industry to 8-11 percent in the ongoing fiscal (FY22) from the earlier estimate of 14-17 percent on account of the ongoing semiconductor shortage. 

Similarly, for the two-wheeler segment, ratings agency said the volumes are expected to contract by 1-4 percent in FY22 against an earlier prediction of 6-8 percent growth as affordability and demand sentiment of target clientele was hit sharply by the second wave of COVID-19 pandemic. For the commercial vehicles segment ICRA maintained it is expected to grow by 18-22 percent in FY2022 and 1-4 percent growth for the tractor segment on a high base of last year.

With around 5 lakh units of production lost by various automakers in the passenger vehicles segment due to the semiconductor shortage, ICRA said the earnings loss for the OEMs (Original Equipment Manufacturers) could be around Rs 1,800 crore to Rs 2,000 crore for the ongoing fiscal. With electric mobility gaining traction, it also said a total investment of around Rs 20,000 crore has been announced in the auto components and electric two-wheeler segments in India by various companies spread over the next three to seven years.