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How the auto sector is recovering after coronavirus lockdown?

People have started buying mini and compact cars to avoid public transport

The coronavirus lockdown has put the already-troubled auto sector in a huge crisis in India as it witnessed almost nil sale in April due to strict lockdown restrictions. Manufacturers then reported almost 80 to 90 per cent dip in the domestic sales in May. However, the pace of decline slowed down in June. Maruti Suzuki and Hyundai Motors which combined account for almost 70 per cent market share, announced 53 per cent and 49 per cent decline in sales respectively for June. The numbers suggest that there is recovery as sales for Maruti Suzuki jumped 3.8 times in June than May and Hyundai sales jumped more than 3 times in June.

How is demand increasing?

After a two-month drought in demand, people who had planned to buy private vehicles in late March, April or May have now started buying them. Also, there is a surge in demand for compact cars mostly by first-time buyers.  Due to the social distancing norms and COVID-19 scare people now want to travel in a private vehicle rather than in public transport to avoid the infection. Manufacturers are expecting the recovery trend to become more strong as the inquiries and booking for vehicles are rising rapidly. Experts believe that the inquiry level has reached 80 to 85 per cent of the pre-COVID times.

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Cars helping in the recovery

Maruti Suzuki recently released the data of total numbers of cars sold. The data suggested that the mini segment comprising Alto and S-Presso regained 56 per cent of the sales it had in June last year. The compact segment which includes cars like Swift, Ignis, WagonR, Dzire, Tour S and Celerio accounted for 26, 695 car sales. The compact and mini segment combined accounted for a total of 37, 154 car sales or 72 per cent of the total sales for Maruti Suzuki in June 2020.

Although there is no official figure, reports suggest that Compact SUVs and small cars witnessed more recovery. However, companies who do not offer small cars have lagged in recovery. Mahindra and Mahindra registered a 43 per cent recovery of sales in June 2019. Honda cars India said that their June 2020 sale in just 14 per cent of the June 2019 sale. Toyota Kirloskar regained 37 per cent of its June 2019 sale.

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