According to the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales in the April-June quarter in India stood at 153,734 units, which is 78.4% down from the same period previous year. All major OEMs witnessed decline in their Q1 FY 2020-21 sales.
Research and consulting company GlobalData forecasts light vehicles sales in India to decline by 32.6% in 2020.
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Bakar Sadik Agwan, Senior Automotive Consultant at GlobalData, says the Indian automotive industry has been hit hard by the COVID-19 pandemic.
“Zero sales in April, limited resumption of economic activities in May and the increasing number of new COVID-19 cases in June and July have severely affected the demand of new vehicles,” Agwan says.
“The after-effect of limited economic activity during April and May has kicked-in as a weak labour market has knocked consumer sentiment and resulted in cautious spending patterns.
“The extension of lockdown till 31 July in several states and weak consumer sentiments over volatile market situation continue to deter customers from big ticket purchases. However, June has been a bit positive, at least for mass market vehicles. OEMs such as Maruti Suzuki and Hyundai witnessed month-on-month increase in June 2020 sales, primarily driven by small cars i.e., entry-level sedans and hatchbacks, and driven by strong demand recovery in the rural areas.
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By GlobalData“However, when compared to 2019, Maruti Suzuki and Hyundai’s June 2020 sales declined by 54% and 49%, respectively. It indicates that the demand is approximately half compared to pre-COVID levels. With the unlock of economy in process, the coming months are expected to witness a gradual increase in month-on-month demand, but getting back to the pre-COVID volume levels will remain a ‘difficult to achieve’ target for the industry and SIAM expects a decline in range of 26-45% in the FY 2020-21.
GlobalData expects change in Indian light vehicle market dynamics with increase in demand for small and mid-size vehicles due to consumer sentiment, which are directly linked to both COVID-19 and the economy. However, with the increasing number of COVID-19 cases and unpredictable market situation in the near-term, GlobalData forecasts new vehicle sales to fall down to 2010 levels.
“GlobalData’s latest light vehicle sales forecast estimates calendar year 2020 sales to reach 2.38 million units, a decline of 32.6% from the previous year,” Agwan adds.
