Second wave may slam brakes on car sales, bookings and production under threat
At a time when buying cylinders and medicines has become top priorities in the midst of a raging second wave of Covid-19 pandemic, it is quite obvious that a large investment into something like a car is likely to take a backseat. In current times of uncertainty, auto sales are likely to crawl in India with people at large expected to become more circumspect about new purchases.
Sales had come crashing down in the month of April in 2020 when a national lockdown owing to Covid-19 had hit production as well as sales. While subsequent months saw a marvelous resurgence - some companies posting record numbers, the current rise in the rate of infections has been unprecedented. Automotive experts largely agree that such could be the magnitude of the second wave that much everything apart from medical expenses could be put off for the future, if not done away with completely. "The pandemic has brought about marked changes in consumers’ car buying plans in India," observes Sanjeev Jha of YouGov India. "The outbreak has affected customers’ finances, driving a conservative outlook in them and diverting them to more immediate needs.
2020 vs 2021
While the lockdown months of 2020 were more about adopting a 'wait and watch' approach, the recent months of 2021 have affected a large number of the country's population directly and across geographies and economic strata. At a time when oxygen cylinders are the need of the hour, many feel that purchases such as cars could lead to an undue pressure on personal finances.
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Also, unlike 2020 when no one wasn't quite sure how long the Covid pandemic would last and many felt it is almost over by the turn of the calendar year, a third wave of the pandemic across India is a cruel reality medical experts are continuously underlining. With challenging times in the present only expected to continue for most parts of this year, it is very likely to have an impact on high value purchases.
Brake on bookings?
The final few months of 2020 saw several new car launches which gave a much-needed boost to the Indian automotive industry as a whole. Some of the newer models have seen waiting periods from several weeks to few months. But all of that could now potentially change. "The number of bookings we were receiving for our cars till even February was terrific. Now, many are calling to cancel and opt for a refund. There is a clear dip," said a company official under condition of anonymity. "Customers are once again becoming extra cautious with finances and may not want to commit to a new vehicle, especially those who may already have at least one car at home."
Several major auto manufacturers have announced a temporary suspension in production and have started annual maintenance operations in current times. From Maruti Suzuki, Honda Cars India and Mahindra to Yamaha and Hero MotoCorp, it is a lull at plants currently amid lockdown and/or curfew rules in place.
While most of these companies assure that supply commitments won't be affected - either at all or by much, it remains a challenge to see how employees' well-being can be ensured while resuming work at full capacity when possible.
For now though, the month of May is likely to be a throwback to lockdown months of 2020 in one way or another and the upcoming months aren't likely to lift market sentiments by mu