Automobile sales recovery at risk

The massive spread of the pandemic and re-imposition of restrictions on people’s movement, and commercial establishments are posing a risk to recovery in automobile sales. Channel checks and interactions with automobile dealerships by analysts at Investec Capital Services (India) Pvt. Ltd indicate an easing of demand and consumer enquiries in July.

“In July 2020 demand enquires have been weak in most of the auto dealerships we spoke to. Dealers in rural areas attribute this to a surge of covid-19 cases in the hinterland, the imposition of a lockdown in cities/taluka places, folks in villages fearful to travel to nearby talukas due to higher instances of Covid-19, engagement of people in agriculture activities as rainfall has been good so far,” analysts at Investec said in a statement.

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An analysis of the automobile registrations and Google search activity of top cars and two-wheeler  models by Jefferies India Pvt. Ltd indicate a slight moderation last week. Two-wheeler registrations fall 38% from the year ago in the week ending 18 July, slightly higher than 33% fall in the previous week (ending 11 July). Also passenger vehicle registrations dropped 18%, higher than 14%.

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