Car Sales Bounces Back In July 2020; Is It Sustainable Though?

While most of you were cursing the ennui on being confined to your homes due to the lockdown, the auto industry (like several others) saw one of the darkest years in recent history. Sales might have been dwindling since 2019 but the month of April 2020 saw it slip to a grand total of zero for the first time in recent memory. However, hope was restored in July 2020 as the numbers shot up to almost the same as July 2019. Just look at the domestic sales numbers.

The numbers are only around a couple of thousand units short of the July 2019 sales. However, it’s double the figure of 98,482 recorded in June 2020. This can certainly be counted as a positive start to recovery for the auto sector. Moreover, this might be the catalyst for bullish product launches in the next months. 

Cream of the crop

Hitting the purple patch are Maruti Suzuki, Tata Motors, Renault and MG Motor. 

Maruti Suzuki: As usual, Maruti clocked nearly half of the total numbers and continued with around 1 lakh sales while seeing a rise of around one percent over last year.

MG Motor: The brand which began its full-fledged Indian innings only last year saw a rise of nearly 40 percent this year. It’s worth noting that it only had the Hector at this time last year while its product lineup has now ballooned to three offerings courtesy of the ZS EV and Hector Plus. 

Hyundai: The Korean carmaker fell just a few hundred units shy of its sales figure this time last year. The majority of the demand was driven by the Creta followed by the Venue, Verna and the Elite i20. 

Renault: The French carmaker’s year-on-year numbers were the most impressive as it saw a rise of more than 75 percent in July 2020. Its growth was bolstered by the Kwid and the Triber which recently received an AMT option as well. 

Tata Motors: The homegrown automaker witnessed a rise of nearly 44 percent over last year’s numbers. That’s probably down to the updates it dealt to its mass offerings like the Tiago, Tigor and Nexon earlier this year. The Altroz would have pepped up its sales figures as well.   

Kia Motor: Kia has taken the market by storm as it made it to the top five on the shoulders of just the Seltos complimented by the Carnival. It recently raked in one lakh cumulative sales and is all geared up to unveil the Sonet on 7 August.

Brands that are almost there

Not every carmaker could get on the gravy train but they certainly registered a hike over the previous months. That should be enough hope that the slump might just be a thing of the past. These include Toyota, Honda, Volkswagen, Skoda, Ford, Nissan and FCA’s Jeep. Expect these carmakers to one-up their previous year’s monthly sales in the future if things remain on the path to recovery.

Will the high demand be sustained?

Our independent surveys conducted at the beginning of the lockdown revealed a lot of pent up demand for cars. More than 36 percent respondents in our survey wanted to get a car as soon as the lockdown limitations were relaxed. The figures seem to have been amped up by the need for social distancing as more and more people tilt in the favour of personal mobility.

With private movement still regulated in some areas, carmakers have come up with online platforms that provide end-to-end buying services to the consumers. This has also helped the buyers in getting their new set of wheels without setting foot outside their home. 

It now seems that both the carmakers and buyers have warmed up to this idea of a new normal. While this initial rebound may also be a result of some residual demand that was unsatisfied during the lockdown, we only expect the sales to continue this positive trend as more and more mass-market offerings pour into the country in the coming months. The forthcoming festive season is likely to inject a new lease of life into sales figures in the coming months too.