India’s auto sales will not recover shortly to the peak-level of 2018 for another 3-4 years as the global pandemic has disrupted deeply in sectors with weak demand. In the current fiscal year started in April 1, sales of SUVs, cars, trucks and motorcycles have fallen 75% in year-on-year comparison to only around 1.5 million vehicles, as the Society of Indian Automobile Manufacturers (SIAM) data shows. The data was compared with more than 26 million units of sales in the 2018-2019 fiscal year before consumer demand slowdown last year dragged auto sales to a 18% lower, an approximate of 21.5 million units.
Rajan Wadhera, president of SIAM, said that the impact of pandemic is very harsh on the industry as the current sector is now in a deep slowdown and the situation will back to normal, as reaching 2018 sales volume in 3-4 years.
India’s lockdown started in late March, forcing all non essential manufactures to suspend production, including automotive. After the production resumed with restrictions, plant utilisation levels are sustaining on low at around 20%-30%. While this month’s plant utilisation is expected to rise to 40%, supply chains are still disrupted as some cities facing fresh imposed second lockdown as cases of the coronavirus infections are rising.
Home to Toyota Motor Corp’s car plant in the southern state of Karnataka, recently went into a week-long lockdown starting Tuesday, July 14, forcing the plants to halt production temporarily.
Although there was some pent up demand for cars, momentum could also be lost without the government helps to boost demand. Recently, SIAM is lobbying for a scheme to incentivise discarding old vehicles and a tax cut on auto sales.
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Published on July 16, 2020 4:02 PM (GMT+8)Last Updated on July 16, 2020 4:02 PM (GMT+8)
