chennai even as sequential recovery continues across all automotive segments volumes in the indian automotive industry have been pushed back by almost 10 years says a report by the icra passenger vehicle volumes for fy2021 are expected to be down by 2225 two wheelers by 1618 light commercial vehicles by 1720 and medium and heavy commercial vehicles by 3540 the auto component industry including tyres is estimated to contract by 1418 in fy2021however icra in its research note expects the pv industry volume to witness more than 15 growth in fy2022 this will be after two consecutive years of negative growth at 179 in fy2020 and 22 to 25 in fy2021 the fall in demand is also being reflected in capacity utilization which is likely to dip below 45 in fy2021 from 5055 in fy2020 we expect capex cut by 3540 during fy2021fy2022 and incremental investments will be primarily towards new product development and platform improvisation on the positives the industrys longterm drivers are intact but compared to the chinese and other key global markets the domestic market is witnessing a slower paced recovery said ashish modani vp icra part of the issue is the increased risk aversion in retail as well as wholesale financing the rural market will be the key driver of volume in fy2021 which will benefit entry level cars and uv said the report buyers may opt for twowheelers or used cars to avoid public transport the share of diesel vehicles is expected to decline below 40 in uvs in the next two years and some manufacturers have already exited diesel portfolio completely the luxury car segment will witness a decline of over 40 in current financial year its penetration in india is the lowest amongst large economies thereby providing long term growth visibility he addedicras channel check on quarterly trends in discounts also indicates that discounts have eased from all time high during h2 fy2020 and certain entry level cars are witnessing waiting period discounts continue to remain relatively high on midsize sedans and diesel variants of certain modelsdemand growth in the commercial vehicles industry fell by 85 in q1 fy2021 severely impacted by extended lockdown across the country which curtailed movement of goods icras analysis shows that although cv retail sales are reviving it remains a far cry from precovid levels