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Vehicle sales slump fear

The overall wholesale dispatches will decline 10-12 per cent in the current financial year

A deserted Outer Ring Road in Bangalore. PTI

Our Special Correspondent
Published 19.04.20, 09:53 PM

The Covid-19 pandemic will have a severe impact on domestic passenger vehicles (PV) in 2021-22.

The overall wholesale dispatches will decline 10-12 per cent in the current financial year. Market sentiments will be depressed owing to the lockdown with buyers putting off non-essential purchases as their income levels plunge, according to a report by rating agency Icra.

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This will delay the industry’s recovery prospects by about six to eight months. Recovery in rural income and an improvement in the overall economic activity will be crucial for a meaningful improvement in retail demand offtake.

Ashish Modani, vice-president, co-head, corporate ratings of Icra Ltd, said, “The domestic passenger vehicle (PV) industry is witnessing a demand slowdown for the last 4-6 quarters because of factors such as economic slowdown, a tight financing environment and inventory de-stocking at dealerships. This has affected wholesale despatches. As a result, industry wholesale volumes declined 17.9 per cent during 2019-20.”

“PV purchase being a discretionary item, an improvement in consumer sentiments and an overall growth uptick in economy is crucial to have any meaningful recovery in the industry. However, the Covid-19 outbreak has drastically altered the landscape and domestic economy is expected to witness significant shock during Q1,” Modani added.

Passenger Vehicles Lockdown Auto Sales Automobile Sector
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