Fears of third wave cast a shadow on auto sector
13 Jun 2021
Last year, after the first lockdown, sales of passenger vehicles (PV) and two-wheelers rose at a brisk pace. As per wholesale data by the Society of Indian Automobile Manufacturers (Siam), from August to October 2020, auto sales were higher compared to the same period in 2019. Analysts FE spoke with said the shift from shared mobility to personal, low interest rates, discounts and sharp rural recovery led to that sales spike. In addition, higher government spending in the infrastructure space gave a push to the commercial vehicle (CV) segment (goods carriers).
However, this time around, after the second wave, most argue, there may not be a similar pent-up demand.
As far as PVs are concerned, Maruti Suzuki registered sales of 32,903 units in May 2021, down from 1,35,879 units in April and 1,46,203 units in March, and Hyundai India sold 25,001 units in May, down from 49,002 units in April and 52,600 units in March. Tata Motors sold 15,181 units in May (down by 39.5% month-on-month); Kia India sold 11,050 units (down by 31.4%); Mahindra sold 8,004 units (down by 56.2%); Honda Cars India sold 2,032 units (down by 77.6%); and Toyota Kirloskar Motor sold just 707 units (down by 92.7%).
While this huge sales drop can also be attributed to most carmakers announcing their annual maintenance shutdown in May, in addition to sporadic lockdowns, the coming months may not bring much cheer.

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