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The second wave of Corona badly affected every sector, including automobiles. The recovery in vehicle sales after the first wave of Corona last year was completely washed away in May this year. According to the Society of Indian Automobile Manufacturers (SIAM), the sales of passenger cars stood at 1.57 lakh till the second wave of Corona hit India in March 2021. But in the months that followed, there was a sharp decline and the car sales figure came down to a low of 41,536. That is, it fell by up to 73.54 percent.
The first wave came after the unlock
According to SIAM’s data from May 2020 to May 2021, there was a tremendous increase in car sales after the first wave of Corona. At the time of the lockdown in the country i.e. in May 2020, 14,460 cars were sold. At the same time, when the market opened after unlocking, by October 2020, the sales figure of cars had reached 1.83 lakh. After this, from the festive season to March 2021, 1.50-1.55 lakh cars were sold every month.
Sale of all big companies stopped
According to data from Federation of Automobile Dealers Associations (FADA), the sales of top companies like Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra and Kia Motors were badly affected during March-April and May. Market leader Maruti Suzuki’s car sales also declined by 72 per cent during this period. At the same time, 62 percent in the sales of Tata Motors, the sale of new generation car Kia also came down by 66%. Apart from this, there was a decline of 65% in Hyundai and up to 64 percent in Mahindra’s sales.
The second wave had a profound effect on the demand for cars.
Rajesh Menon, Director General of SIAM, says that after the arrival of the second wave of Corona in India, lockdown went on in many states one after the other. Apart from this, different types of restrictions were imposed in many states. This affected the production along with the sale of cars. Due to the lockdown, dealerships were closed in many states and due to financial troubles, the demand also dropped drastically. Due to these many reasons, sales declined by 10% between March and April and by 70.58% between April and May.
Companies are getting active again
According to Rajesh Menon, there is still a lockdown in many places and relief is being given for the market in different phases. The rapid vaccination will help in controlling the effect of corona, due to which all the resources of the economy will open up, the market will also start booming and along with the production of cars, sales will also improve gradually. Automobile companies are also becoming active at their level. Work is also being started in factories as per protocol. Along with this, companies are getting their employees vaccinated. It is expected that the automobile sector will also gradually come back on track.
Due to low sales, dealers are at risk of defaulting
According to Vikesh Gulati, president of Federation of Automobile Dealers Association, the second wave of corona in India was fatal. There were very few such houses in the country, which were not affected by Corona in some way or the other. Along with the urban areas, this time in the rural areas too, Corona created a furore, which also affected the automobile sector. Due to low sales, the arrivals of dealers have been severely affected and due to this, they will not be able to repay their loans on time, putting them at risk of default. That is why we have appealed to the Prime Minister that instead of restructuring the loans of such dealers, they should be given a moratorium period of 90 days.
There is hope with the arrival of monsoon on time
Vinkesh Gulati says that after the unlock, in the first 9 days of the month of June, there is an improvement in the sales of vehicles in many places. If this trend continues, the sales are likely to be at par with the month of June last year. At the same time, the arrival of monsoon in India has been on time. According to the forecast of the Meteorological Department, there will be good rain all over the country. If this will give a lot of relief to the rural economy, it is clear that the automobile industry will also benefit from it and the recovery rate will improve.