People are in no hurry to get their own wheels
1 min read 14 Jul 2020, 03:17 PM ISTThe latest passenger vehicle sales figures released by SIAM show a drop of about 50% in June. This suggests that a big covid-induced switchover to private transport is yet to materialize.
PremiumLatest automobile sales figures from the Society of Indian Automobile Manufacturers (SIAM) offer a picture of an economy in pain. On Tuesday, the automotive body put out data for June—after failing to issue numbers for the previous two months, perhaps on account of lockdown constraints on data gathering. Last month marked the start of our “unlock" phase, and hopes had arisen of a burst of pent-up demand coupled with a new desire for personal wheels, given the infection risks of public transport. The offtake of passenger vehicles, however, was only half the figure achieved in June 2019. For the first quarter of 2020-21, sales were down some 78%, year-on-year.
The figures are a disappointment, to say the least. Rajan Wadhera, president of SIAM, is reported to have said that it may take as many as four years for automobile sale volumes to reach the levels seen in the early part of 2018. This is especially worrying. A delayed recovery would bode poorly for India’s broader manufacturing sector and the economy as a whole. Perhaps the numbers for July will be better, given signs of a pick-up in economic activity. The expectation that seems to have fallen flat is that of people taking to personal vehicles in a big way to avoid corona exposure. Even if many more Indians would like their own set of wheels, they do not seem confident of being able to pay for it.
If two wheelers have performed relatively better, with only a 39%-odd decline, it is probably because India’s rural sector has held up better than the rest of the country. Agricultural output this year is expected to be robust, with a bumper harvest a distinct possibility. However, it would take a broad revival for the return of any cheer to this industry.
