Second Covid-19 wave will impact auto sales

As far as the CV industry is concerned, he said it works on ‘anticipation’, i.e. what does a buyer anticipate over, let’s say, next six months or one year.

By:Updated: Apr 24, 2021 11:30 AM
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The impact of the second wave will definitely be there on auto sector sales, said Indermohan Singh, partner, Shardul Amarchand Mangaldas. “While over the last 4-5 months both passenger vehicle (PV) and commercial vehicle (CV) sales were on a recovery path—with two-wheeler sales recovering faster—the second wave of the coronavirus will negatively impact sales,” he said.

A major challenge, he said, will be on the supply/production side. “Already, we saw shortage of critical components such as semiconductors, and now with Maharashtra and some southern states under partial lockdown—where a lot of component makers are located—this might impact supplies,” Singh said. “There will be production constraints in two-wheeler manufacturing in particular.”

As far as the CV industry is concerned, he said it works on ‘anticipation’, i.e. what does a buyer anticipate over, let’s say, next six months or one year. “While the truck segment, linked to movement of goods, may not be severely impacted, but the bus sub-segment depends upon reopening of schools, inter-state travel, tourism and industrial activity (for ferrying office staff), and it will get negatively affected for sure.”

Overall, the impact of the second wave on PVs and CVs may be substantial, and while demand side of two-wheelers may not be impacted much, the supply side could be a challenge in the short term.

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