Small and Mid-Size Vehicles are Expected to Drive Post-COVID-19 Recovery in India

Maruti Suzuki reported that retail inquiries and bookings reached 80-85 percent of pre-pandemic levels in June 2020. Hyundai reported to have received 20,000 inquiries and over 1,900 bookings through its online platform ‘Click-to-buy’ since its launch in March 2020.

FREMONT, CA: Major automakers, including Maruti Suzuki and Hyundai reported healthy growth in month-on-month sales volumes because of the rise in demand for personal mobility and various other factors. Automotive sales saw significant growth in June 2020 after meager sales in April and May. Retail activities increased as the country witnessed relaxation in lockdown norms in most regions starting from 8 June.

The majority of the auto dealerships in India are now operational, and the market is steadying back on track. Data collected market leaders implies that new vehicle bookings and inquiries are improving and getting close to the pre-pandemic levels as the customers now have the option to book vehicles at dealerships and online. Maruti Suzuki reported that retail inquiries and bookings reached 80-85 percent of pre-pandemic levels in June 2020. Hyundai reported to have received 20,000 inquiries and over 1,900 bookings through its online platform ‘Click-to-buy’ since its launch in March 2020.

In respect of volumes, Maruti Suzuki reported domestic sales of 52,300 units in June 2020, which is 277 percent up from the previous month’s 13,865 units. Hyundai’s June 2020 domestic sales reached 21,320 units, increased from 6,883 units in the previous month. The growth in volumes for both the companies is primarily attributed to small cars like entry-level sedans and hatchbacks, driven by strong recovery in demand in the rural areas.

Small cars have seen healthy growth in demand. A sudden increase in fuel prices and little difference between the prices of petrol and diesel impacted customers' decision-making and preferences. All these factors have favored affordable and cost-efficient petrol variants. There has also been a spike in demand for CNG vehicles amid the increasing prices of petrol and diesel. Recent trends also indicate that COVID-19 and current economic conditions would significantly impact preferences and product segmentation.