Easing supply and pent-up demand to boost auto sales: A CRISIL analysis

Commercial vehicle (CV) volumes are expected to rise 20-22 per cent this fiscal, aided by economic recovery and the government's infra spending.

Chip shortage, the second wave of Covid-19 infections, and higher ownership costs have constrained what could have been a strong recovery in automobile sales this fiscal, on a low base. 

Next fiscal year, however, pent-up demand, easing of demand-supply challenges, inventory build-up, sustained economic recovery and better finance availability should drive healthy volume growth. 

While passenger vehicle (PV) sales growth is expected to moderate to 11-13 per cent this fiscal year because of chip shortage, volumes are expected to grow a stronger 12-17 per cent next fiscal year, supported by pent-up demand and low inventory with dealers.  

Commercial vehicle (CV) volumes are expected