In other words, COVID-19 lockdown could be just a precursor of a massive sales boost in the near future
COVID-19 has spread its effect beyond human lives, bringing down many business operations to a halt. Global automotive industries have been affected badly as several brands have completely shut down their facilities or are working with extremely limited resources.
In India, the ongoing lockdown has been extended to 3 May 2020. It remains unclear if OEMs would be able to function like usual after the nationwide control measures are withdrawn.
R.C. Bhargava, Chairman of Maruti Suzuki India Ltd (MSIL), has an interesting theory. He believes that India’s lockdown policy could be a precursor to a ‘car boom’. Mr Bhargava claims that if buyers are anxious about sharing space with another passenger, it will increase the demand for individual-use vehicles. He backed his statement by adding that India is not the same anymore and people’s attitude towards buying is bound to change.
While Mr Bhargava’s words seem a bit hard to digest, a similar trend was observed in China; the epicentre of COVID-19 (or SARS-CoV-2). Car buyers in the People’s Republic are apparently considering personal vehicles safer than public transport. As a result, the Chinese automotive market is seeing similar or better sales compared to the days prior to the lockdown.
At the moment, several automotive dealerships are on the verge of going out of business forever. Taking note of this situation, a few brands have come forward to financially back their struggling dealer and service partners. On top of all this, many dealerships are left with a stockpile of unsold BS4 vehicles collectively accounting to more than a thousand crore rupees.
The deadline to finish selling BS4 products was recently extended by the Supreme Court of India but on a conditional basis. Furthermore, March 2020 sales have dropped down to an all-time low for many OEMs. In fact, Tata Motors registered an 84% loss on the sales chart. Owing to all this, many have pointed out that India’s automotive industry is not receiving the support it requires at the moment from concerned authorities.
Amidst the lockdown, quite a few new products were also launched. OEMs across the world have relied on social media platforms to unveil their latest products or host important events. As a recent example, Hyundai Motor India recently launched the much-awaited 2020MY Verna sedan. Meanwhile, the BS6 diesel Elantra is expected to debut in a few weeks’ time.