Indian automotive sector receives a shot in the arm in Q4 of FY’2020-21

- Utility Vehicle segment has registered 10.8 per cent growth in sales in FY2020-21

- The three-wheeler category has been the worst affected in FY2020-21

The financial year 2020-21 started on a negative note with the nationwide lockdown in April 2020 due to the COVID-19 pandemic. It was only after mid-May when the government gradually relaxed the norms and allowed businesses to open in a phased manner. However, poor consumer sentiments and uncertain market conditions resulted in low car sales in the country. There was a brief increase in car sales during the festive period of Navratri, and that ushered in fresh hopes for the auto industry. In January 2021, the Indian government commenced the vaccination drives in a phased manner and the businesses started gaining momentum. Some share of positivity was rubbed onto the reeling auto industry as consumers once again considered new car purchases.

Speaking of personal vehicle sales in the last quarter of FY’21, the industry registered 9,34,000 unit sales in the country from January to March 2021, as compared to 6,56,000 units in the same period in FY’20, thereby registering a 29.7 per cent growth in sales. Apart from the passenger vehicle segment, the industry has registered 2,10,000 commercial vehicle unit sales, 86,000 three-wheeler unit sales, and 43,54,000 two-wheeler unit sales in the Q4 of FY’21.

For obvious reasons, cumulative vehicle sales across all vehicle categories have been the lowest in FY’21 as compared to sales in the last five years. Interestingly, passenger vehicle sales have reported only a 2.2 per cent drop in sales with 27,11,000-unit sales in FY’21 as compared to 27,74,000-unit sales in FY’20. Although vehicle sales across segments have been affected, the utility vehicle segment has emerged strong with 10,61,000-unit sales in FY’21 as compared to 9,46,000-unit sales in FY’20, thereby registering 10.8 per cent growth in sales. 

Overall, the three-wheeler segment has been the most affected followed by the commercial segment. In the new fiscal year 2021-22, COVID-19 once again threatens with a lockdown-like situation that could have an impact on car sales in the country. That said, the need for personal mobility over public transport will continue to lure in car buyers in the country.