Autobayng News Team
India’s automobile dealers on Monday warned of possible supply and dispatch disruptions in the near term as the ongoing West Asia conflict pushes up raw material and logistics costs, even as the sector closed FY2025-26 with record retail sales.
The Federation of Automobile Dealers Associations (FADA) said the broader operating environment remains uncertain due to the geopolitical situation, which has led to rising oil and gas prices and higher costs of key metals such as aluminium, copper and steel used in vehicle manufacturing.
“The broader operating environment is clouded by the conflict,” FADA said in a statement.The dealer body noted that higher fuel prices are impacting the auto supply chain through increased logistics and transportation expenses, while also creating inflationary pressure on vehicle input costs.
Last week, Maruti Suzuki India, the country’s largest passenger vehicle maker, indicated that it may raise prices as commodity costs rise following the conflict.
Dealers flag supply delays
A FADA survey showed that over half of the dealers have already faced some form of supply or dispatch disruption linked to the conflict. Around 17.1 per cent reported significant delays of three weeks or more, the association said.
On the demand side, 36.5 per cent of dealers said rising fuel prices are moderately to significantly influencing customer purchase decisions.FADA said the impact has been most visible in the commercial vehicle segment, though passenger vehicle and two-wheeler dealers have also reported selective delays depending on variants.
Retail sales remain strong
Despite the emerging concerns, India’s retail auto sales grew 25.28 per cent year-on-year in March, supported by sustained momentum from tax cuts that improved affordability, FADA said.
Passenger vehicle retail sales rose 21.48 per cent in March, while two-wheeler sales increased 28.68 per cent and commercial vehicle sales grew 15.12 per cent.For the full financial year, total retail sales rose 13.3 per cent, according to the dealer body.
FADA also said passenger vehicle inventory levels continued to improve for the sixth consecutive month. The average stock holding period fell to around 28 days in March, compared to 52 days in March last year, indicating healthier dealer-level supply.
The association said it will continue to monitor supply chain conditions and commodity price trends closely as geopolitical tensions persist.
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