Reviving Automobile Sector fears slow down, due to Lockdown for controlling the second wave


The year 2021 is the year of hope for all, so it is to the automobile industry. After the shock slowdown in the year 2020 due to the pandemic, the Indian automobile industry is recovering from the unprecedented lag in sales. Customers are showing greater, intent, interest, and curiosity.

While we are about to end the financial year with only a few days left car sales have been on the green patch. The total output at the beginning of the year 2021 was 3,03,833 units and in Feb, it did not lose any pace with 3,08,804 units being sold.

The economy is showing signs of recovery, also now with the vaccination drive carried out at full pace, 2021 for sure instills some confidence in the minds of both the consumer and the automobile manufacturers.

The sales in March are expected to be higher following the ongoing growth trend that we have seen until now. Last year ended with a total volume of sales crossing 27 lakh units (27,73, 575). The FY 2021 was a test of the resolve of all the car manufacturers in India with zero number of cars sold in April. But if you carefully look the automobile segment in India has gradually closed the gap and is riding on top gear. Total sale of motor cars till Feb has been 23,90,532 units although which may seem to be considerably high if you think how the FY began back in 2020. To reach the last year’s mark the total sales of cars in the industry should cross the Jan – Feb mark and reach up to 3,83,043 units that are even greater than the highest recorded month of October which sold 3,33,984 units.

The Society of Indian Automobile Manufacturers (SIAM) estimates the total volume of sales to be around 26.80 lakh considering the uncertainty of output in March and the dry start to the fiscal. The demand for new cars seems to overpower the supply capacity of the manufacturers since personal safety and the need to accommodate travel convenience has kicked in and buyers are showing rejuvenated interest in the upcoming and eye-catching car models.

It is estimated that the carmakers in the auto industry suffered losses of more than 2300 crores during the prolonged lockdown. The manufacturers have indeed kept on the fight and stayed operational following the COVID 19 standard operating procedures. Optimum usage of resources and a move towards digitalization have kept the cashflows positive by reducing cost. The carmakers in the Indian market have felt the shortage of key components like semiconductors, chips and steel which has reduced their overall manufacturing capacity. This has directly hit the overall sales as production falls short compared to the market demand for passenger vehicles.

Big players of the automobile industry like Hyundai Motor India, Toyota Kirloskar Motors, Maruti Suzuki, Mahindra and Mahindra, Honda Car India, and Ford have found it difficult to touch the green light, whereas the other persistent players like Renault, Nissan, MG Motor, and Kia Motor have caught more attention of the customers with their modernistic architecture, design, and features.

So far it has been a story of persistency and strong recovery. The impact of COVID – 19 continues to wreck trades and economies of nations, still, the Indian automobile industry has been able to tame the affects to a huge extend. Starting the fiscal year of 2021 with zero sales value the car industry has recuperated well showing the strongest sales record ever in the H2 and not to tell the month of March yet to be over expectations are high.

With Q3 of the FY 2021 seeing a total sale of 8,97,915 units which is a record, one can say that it could be a close shave, with the 4th quarter close to the finish line. But, if you are expecting the Indian automobile industry to achieve the feat of FY 2019 which sold 33,77,463 units, then it would be too much to bite.

The main reason to worry is that as the FY 2021 ends, we are seeing another issue that is cramping the automobile manufacturers which is the rising number of people infected by the coronavirus. As it stands now with Maharashtra having over 2 million active cases, Kerala with over a million, Delhi, West Bengal and Tamil Nadu combined has over 2 million cases it is uncertain and difficult to predict the user behaviour. Although customers will be willing to make the purchase the rising number of COVID patients could trigger a negative sentiment among the people and force them to delay their purchase which on the other hand could leave car manufacturers in a no man’s land. It would be interesting to see how the automakers strategically plans for the upcoming FY 2022 and makes it profitable for both the parties – the customer and for themselves?

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