Maruti Suzuki and Hyundai India have both reported growth in vehicle sales in June 2020, compared to the previous month, as India's vehicle market appears to be entering a recovery phase.

In terms of volumes, Maruti Suzuki reported domestic sales of 52,300 units in June 2020, which is 277% up from the previous month's 13,865 units. Hyundai's June 2020 domestic sales reached 21,320 units, up from 6,883 units in the previous month. The growth in volumes for both the companies is primarily in small cars – entry-level sedans and hatchbacks, driven by a strong recovery in demand in the rural areas.

Retail activities picked up as the country witnessed relaxation in lockdown norms in most regions starting from 8 June. Major automakers in India report a rise in demand for personal mobility.

"Most auto dealerships across the country are now operational and the market is limping back on track," says Bakar Sadik Agwan, Senior Automotive Consultant at GlobalData.

Data from market leaders indicates that new vehicle enquires and booking are improving and getting close to the pre-COVID-19 levels as the customers now have the option of booking vehicles at  dealerships as well as online. Maruti Suzuki reported that retail enquiries and bookings reached 80-85% of pre-COVID-19 levels in June 2020. Hyundai reported to have received 20,000 enquiries and over 1,900 bookings through its online platform 'Click-to-buy' since its launch in March 2020.

"On expected lines, small cars have witnessed healthy growth in demand. The prevailing economic instability due to COVID-19 is keeping Indian customers away from big ticket purchases," Agwan says. He also maintains that COVID-19 has shifted consumer preference from 'public' to 'personal' mobility.

He also says a sudden spike in fuel prices and narrowing gap between the prices of petrol and diesel have also impacted decision-making and preferences.

"All of these factors have acted in favour of affordable and cost-efficient petrol variants," Agwan says. "There has also been increase in demand for CNG vehicles amid the increasing prices of petrol and diesel."

Agwan maintains that while current sales volumes are significantly lower than 2019, June's uptick is indicative of positive trends for the coming months.