With demand of two wheelers and four wheelers deteriorating and no new fresh bookings for passenger cars in states witnessing partial lockdowns and restricted movements, automakers and dealers are suspecting that the aftereffects will likely stretch till May.
The Indian auto industry hadn’t even completely recovered from the COVID-19 crisis yet and the second wave has already started taking a hit on sales. With demand for two wheelers and four wheelers deteriorating and no new fresh bookings for passenger cars in states witnessing partial lockdowns and restricted movements, automakers and dealers are suspecting that the aftereffects will likely stretch till May. According to a report published by ET Auto, auto sales in the June quarter are likely to be disrupted due to the COVID situation.
Vehicle dealerships continue to remain shut across the most impacted states such as Maharashtra, Rajasthan, Madhya Pradesh and Delhi among others as the state authorities work to control the rapidly spreading infection and ramp up the vaccination drive. This situation comes at a time when typically the demand for vehicles is on the upswing especially due to the festive season like – Holi and Navratri in the North and Gudi Padwa in Maharashtra. Moreover, this is also a month of strong rural demand for two-wheelers and cars as the Rabi harvesting is under way and farmers have finances to buy.
“There is a lot of inventory but no buyers. Customer sentiments are deteriorating, as Andhra Pradesh is about to record 10,000 new covid-19 cases on Thursday. People across the poor and lower middle class categories are worst impacted. Many people are withdrawing their provident funds to survive. Our showroom footfalls have dropped sharply this month,” an Andhra based dealer told ET Auto. A Maharashtra-based Hero MotoCorp dealer, who wished not to be named in the story, confided that there are over half-a-dozen trucks loaded with Hero motorcycles and scooters parked across his multiple showrooms, all waiting to be unloaded at a time when stores are shut and there is no demand.
According to a report published by Motilal Oswal Financial Services Ltd., the inventory at Hero MotoCorp (up to 60 days), Bajaj Auto (up to 50 days) and TVS Motor (up to 40 days) was manageable at the start of the month, with a supporting number of enquiries and bookings. However, dealers saw a significant increase in cancellations with the rise in covid-19 cases.
Source: ET Auto