2020 Car Sales Analysis: Impact of COVID-19 on automobile industry

- Coronavirus has affected the global economy

- More demand for the base variant during the ongoing pandemic situation 

- COVID-19 vaccine likely to improve consumer sentiments

The Coronavirus pandemic has affected lives and businesses globally. In an effort to save lives and restrict people’s movement, the Indian government had announced a complete lockdown across the country. Its immediate effect was seen at the start of the financial year 2020-21 with zero car sales in April as most manufacturing units, logistics, and sales were halted until further notice. Sometime in mid-May, the dealerships resumed partial operations and completed pending deliveries. With a gradual relaxation in norms, the car sales started picking up pace from June onwards. 

The improvement in car sales was attributed to customers seeking a personal mode of commuting instead of opting for public transport. Additionally, lucrative and easy finance options from financial institutions have boosted new car purchases. That said, the overall car sales in the current fiscal year will be low as compared to the financial year 2019-20. Until now, the month of October was the most generous month for car manufacturers in the country, thanks to the auspicious period of Navaratri followed by the festival of Dussehra. Contradictory to the belief, car sales during Diwali, in November, were lower as compared to October 2020.

For the most part of the current financial year, Maruti Suzuki, Hyundai, and Tata Motors have been claiming the first, second, and third position in terms of car sales, respectively. A few months back we had also revealed about the growing demand for base and other lower-spec variants, as customers seek more budget-friendly options. To learn more about it click here. The hike in prices with the BS6 model update and poor consumer sentiments have fuelled demand for the base variants. The A-segment and the B-segment have been the popular choices among customers. Apart from these, there has been a spike in sales in the compact SUV segment with a few recent launches from the likes of Kia Motors and Hyundai in India. 

Maruti Suzuki continues to lead with a majority share in the Indian market. Some of the popular selling models for the company in the last few months were the Swift, Baleno, Ertiga, and the Wagon R. 

Since the last few years, Hyundai has been a strong competitor to the market leader, Maruti Suzuki. The South Korean car manufacturer competes with a strong product line up in the A, B, Compact SUV, and the SUV segments. Some of the popular sellers for the company so far were the Creta, Venue, Grand i10, and the Elite i20. Back in November, the company launched the third-generation i20, which has already received over 30,000 bookings in just 40 days.                

Tata Motors, the third bestseller in the country until now, has been performing well with good sales from the Altroz, Tiago, Tigor, and the Nexon. Kia Motors, relatively a new entrant in the Indian market has been marginally missing out on the third position. Currently, Kia holds the fourth position in terms of cumulative sales and the feat is indeed commendable considering the fact that the brand only has three models in the product line up, which include Sonet, Seltos, and the Carnival, wherein a majority of the sales are raked in by the first two models. 

The month of December will be slow for the majority of the car manufacturers. In an effort to boost sales, the auto manufacturers with products in the A and the B segments will introduce special offers or limited-edition trims based on the existing variants. Sales are likely to be more or less similar to the current month till March 2021. It is only from the new fiscal year 2021-22 that the auto industry might witness a minor growth in sales, which is expected to be further boosted with the Coronavirus (COVID-19) vaccine in place. 

Car models like the Maruti Suzuki Swift, Maruti Suzuki Baleno, Tata Altroz, Hyundai Grand i10, Maruti Suzuki S-Presso, Hyundai i20, and the Renault Kwid will continue to sell strong in the country in the current fiscal year. Additionally, the cumulative car sales will also see some contribution from the likes of Maruti Suzuki Ertiga, Hyundai Creta, Hyundai Venue, Maruti Suzuki Vitara Brezza, Kia Sonet, and the Kia Seltos. Recently, Nissan has made a promising comeback with the launch of the Magnite. The compact SUV is currently raking in good interest with over 5,000 bookings within just five days of launch and is expected to help the company to retain its presence in the Indian market. 

Overall, the pandemic has undeniably affected the Indian as well as the global economy. As the COVID-19 vaccine is likely to be a reality soon, the industry will gradually limp back to a better position in the next fiscal year.