Waking up from its slumber sedated by the lockdown, the Indian automobile industry in August recorded a spike in vehicle sales after several months of severe slowdown. The auto sector, which was struggling since 2019, was dealt a serious blow with the coronavirus outbreak and the subsequent nationwide lockdown. This not only prevented people from visiting dealerships but also lowered the buying sentiment, affecting vehicle sales in the long run. However, some signs of recovery were observed in July and sales in August 2020 turned out to be better than what the industry players were expecting. According to Vinkesh Gulati, President, Federation of Automobile Dealers Associations (FADA), the Indian auto sector's rate of recovery has been better than expected.
Speaking to Times Drive, Vinkesh Gulati mentioned that vehicle sales in India is approaching pre-COVID level. He mentioned that auto sales decline in June 2020 as compared to June 2019 was 42 per cent. Things improved in July 2020 with the sector registering 36 per cent sales decline as compared to July 2019 and the degrowth narrowed to 26.81 per cent last month as compared to August 2019. FADA President added that passenger vehicles sales in August 2020 was only around seven per cent lower as compared to August 2019, indicating that the rate of recovery in the auto sector in India after lockdown has been much better than expected.
Vinkesh Gulati also mentioned that states like Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, and Delhi recorded a significant spike in passenger vehicle sales last month. However, the main reason for improving automobile sales in India has been the rural market. Thanks to a bountiful monsoon in most areas, demand for new vehicles in rural regions has been fairly robust. This trend is likely to continue throughout the festive season as rural customers usually prefer to buy vehicles during this time. And with lucrative deals and flexible payment options, automakers have the chance to rack up substantial sales during this festive season, fueling the auto sector's revival. But not discounting the effects of COVID-19 on the economy, Vinkesh Gulati added that festive season 2020 is unlikely to be as rewarding as last year's. (Source: Times Now)