“Long-term recovery of demand will depend on the fundamentals of the economy and the nature of the virus,” he said.
Auto dealers said the significant increase in wholesale numbers was also driven by a need to fill the depleting inventory as most dealerships were transitioning to BS-VI when lockdown was announced.
“All dealers had almost cleared BS-IV stock and the lockdown was announced on March 24. So, there was almost near nil inventory and, hence, an opportunity for stocking up was there which is reflected in the wholesale numbers,” said Nikunj Sanghi, managing director at JS Fourwheel Motors, and past president of FADA, the association of auto dealers. “Fundamentals of the economy has been weak and consumer demand
is weak. So, while July looks good, they are largely a sign of pent up demand which was halted during the lockdown.”
The pandemic has resulted in rampant salary and job cuts as firms face existential crisis.
As income levels fall, top-selling models for the month of July and consumer enquiries also reflect that buyers are going for more affordable models. The top-selling models were entry-level models like Alto and Wagon R. In Maruti’s recent analyst call, the company mentioned that the percentage of inquiries for the hatches is around 65 per cent as against 55 per cent in the past.
“While there is a trend of people preferring personal transport, their income levels are also probably going to be suppressed for some time. So, the trend is towards what we call telescoping of demand downwards, that is logical and intuitive,” Srivastava said.
Banks and NBFC have also become more cautious. “There is little chance that banks will offer loans to a customer who has opted for a moratorium. We are also closely examining change in income before extending credit,” said an executive of an NBFC.
that have launched new models said they have seen good customer response. A slew of launches in recent months has helped Hyundai to clock sale of 38,200 units just 2 per cent less than what it sold in July 2019. Tarun Garg, director (sales, marketing and service) at Hyundai Motor India, said: “With 38,200 units, July domestic sales volume is 98 per cent of July 2019 domestic sales volume. This performance was driven by good customer demand for our most admired brands.”