Omicron variant of Covid-19 spread may impact passenger vehicle supply: FADA

Automobile dealers' body FADA on Thursday said passenger vehicle supplies may get affected further, if chip making countries go under lockdown due to the spread of Omicron variant of COVID-19.

The industry body, however, noted that it expects the semiconductor shortage situation to normalise by the second half of next year.

"We see year 2022 as a neutral year as the rise of Omicron has once again created fear globally. This may further impact the supply in passenger vehicles if chip making countries go under lockdown or prioritise chip making for electronics used for work from home," Federation of Automobile Dealers Associations (FADA) President Vinkesh Gulati said in a statement.

FADA anticipates that the second half of 2022 may see supply as well as demand slowly coming back to normalcy, he added.

"Auto Industry may fully recover only by 2023 and come back to its pre-COVID levels, if COVID becomes a history," Gulati said.

He, however, noted that the two-wheeler market which continues to face demand headwinds may further go into slump, if the third wave becomes a reality.

FADA represents over 15,000 automobile dealers having 26,500 dealerships across the country.