India Auto Dealers Warn Of Supply Disruptions Amid Iran War Impact

India’s automobile dealers have raised concerns over potential supply and dispatch disruptions as the ongoing West Asia conflict drives up input and logistics costs. The Federation of Automobile Dealers Associations (FADA) said the rising uncertainty is affecting the overall operating environment, even as the industry recorded strong sales growth in the last financial year.

The conflict has led to higher oil and gas prices, increasing transportation and production costs across the auto supply chain. Prices of key raw materials such as steel, aluminium, and copper have also surged, prompting companies like Maruti Suzuki to consider price hikes. A FADA survey found that over half of dealers experienced supply or dispatch issues, with about 17% reporting delays of more than three weeks.

Despite these challenges, India’s auto retail sales showed strong momentum. Total sales rose over 25% in March, with passenger vehicles, two-wheelers, and commercial vehicles all registering healthy growth. However, rising fuel prices are beginning to impact consumer sentiment, while inventory levels have improved, with vehicle stock duration dropping significantly compared to last year.

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