In a recent survey by Car and Bike, it was discovered that the demand for cars under 7 lakh might surge after the lockdown ends.
The Indian auto industry is currently going through an extremely tough time. Since last year, there's a sales slump in the car market, and after the nationwide lockdown, carmakers have seen further decline in sales. At the moment, many companies have taken advantage of the relaxations provided by the government to home-deliver vehicles to customers, thus trying to resume sales operations. Still, consumer behaviour has been hugely affected, and the repercussions will be seen once the lockdown is lifted. India’s largest manufacturer, Maruti Suzuki, has seen a huge decrease in car bookings- from 5,000 a day before the lockdown, to only 6,000 a week during May 2020.
Used car sales are expected to increase after the lockdown ends
According to many industry experts, there will be an increase in personal mobility, as shared mobility doesn’t allow for proper social distancing. Also, with the current state of the economy of our country, people will be less willing to spend money. The survey shows that the demand for cars above Rs. 9 lakh used to 48 per cent, but is currently at only 34 per cent. For cars between Rs. 7 – 9 lakh, the demand has fallen from 16 to 11 per cent.
As for the car in lower price brackets, the demand has increased. For cars between Rs. 5 – 7 lakh, the demand has risen from 12 to 17 per cent, and for cars between Rs. 3 – 5 lakh, the demand has gone from 14 per cent up to 16 per cent. It surely seems that new cars, like Maruti Swift, Tata Tiago, Hyundai Grand i10 Nios, etc, will see an increase in sales. Even the lower trims of vehicles like Maruti Baleno, Maruti Dzire, Hyundai i20, and Hyundai Aura might see an increase in customer interest.
Industry experts say that new car sales will surge post-lockdown
The biggest increase in demand has been experienced in cars further below the price range. For cars priced between Rs, 2 – 3 lakh, the demand has become two-fold, from 6 to 12 per cent. For cars priced below Rs. 2 lakh, the demand has increased to 2.5 times, from 4 to 10 per cent. This could mean that a huge chunk of the buyers might be interested in purchasing used cars over new cars. The increase in demand in lower-priced cars is indicative of the change in the financial planning of the general population.
The survey also reveals that people who were previously willing to buy a car in cash are also changing preference towards getting loans. Also, 42 per cent of people have stated that they have reduced their budget for a car purchase, and a further 32 per cent have stated that their budget has remained the same as it was pre-lockdown. Surprisingly, 26 per cent have stated that they’ve increased their budget.