Automobile sales witnessed an unparalleled decline during Apr20, falling down to record low levels. Passenger vehicles were unable to register any sales during Apr20, highlighting the pandemic’s effect on the sector. The industry’s overall sales fell by 95% MoM to 4,896 units.
- The automobile industry was compelled to temporarily cease operations on account of the lockdown restrictions placed to curb the spread of the virus. In additional to taking a toll on automobile sales, the lockdown caused even production levels to decline to zero during the month.
- Tractor sales, however, managed to show resilience amidst the pandemic and depicted a fall of 30% MoM to 2,035 units. This fact highlights the agriculture industry’s relative insulation from the lockdown restrictions.
- Going forward, we believe the automobile industry may be subject to restrained demand on account of the anticipated reduction in purchasing power in light of the economic losses caused by the lockdown. The industry may, however, find respite from the recent reduction in interest rates, potentially catalyzing sales via auto-financing. Moreover, lower fuel prices may also instigate demand by reducing the cost of operating a car.