Rising fuel prices to hit auto sector recovery: Siam
The possibility of the third wave of the Covid-19 pandemic coupled with the rise in fuel prices has put the industry in a difficult situation
Apex auto industry body Siam has expressed concern that a steady rise in fuel prices is likely to exacerbate the woes of already sluggish sector, Times Of India reported Thursday. The cascading effect of back-to-back hike in fuel price will increase the freight costs leading to an inflationary trend, which will ultimately hit the demand for two-wheelers and cars. This comes at a time when the industry is still fighting with uncertainties around the Covid-19 pandemic and the possibility of a third wave looming around the corner, the report added.
Sluggish sales
With petrol prices breaching Rs 100- mark and diesel above Rs 90 in most parts of the country, sales of cars and two wheelers will be hit, Kenichi Ayukawa, CEO of Maruti Suzuki and the president of Industry body Society of Indian Automobile Manufacturers (Siam) told TOI.
Market trends should be closely monitored as the rise in fuel prices is a worrying sign as it would negatively impact the auto industry coupled with a demand slowdown, Ayukawa added.
Rising fuel may act as a deterrent for customers from using vehicles frequently, and this would become a major issue, he said.