Pinned down by the lockdown, the auto industry can recover only in the second half of the current fiscal, analysts said.

The crisis in the industry come at a time car makers were shifting to the BS-VI emission regime.

The analysts point out the full impact of the lockdown will be felt in the first quarter of this fiscal since the shutdown in the operations began only in the second half of March.

Even if the restrictions are lifted in early May in some parts of the country, a revival in fortunes will not be immediate.

“We expect the automobile industry to report close to nil volume in the first quarter of 2020-21 and more than 50 per cent decline year-on-year in the second quarter which would start to improve from the second half of 2020-21 onwards. We expect the volume of various automobile segments to decline in the range of 20 per cent to 35 per cent in 2020-21,” analysts at Reliance Securities said in a report.

They added a recovery can be expected only by the end of the current fiscal.

The two wheeler segment would outperform the rest of the industry because there will be demand for them in remote rural regions, where public transportation is limited.

According to the brokerage, the automobile industry delivered a highly subdued volume performance in the fourth quarter of 2019-20, largely impacted by the nationwide lockdown during the second half of March and the disruptions led by the BS-VI transition.

Volumes declined by high-double digit, as BS-IV inventory liquidation restricted wholesale dispatches towards the end of the quarter.

Though retail sales were marginally better, the dealers were reluctant to build on inventory because of the impact of Covid-19, which was felt even before the lockdown.

Retail sales were hit as buyers delayed purchases in the expectation of flash sales of BS-IV vehicles towards the end of the January-March quarter.

For the fourth quarter of 2019-20, the brokerage expects auto companies under its coverage to witness 27 per cent decline in revenues over the same period of the previous fiscal. Net profit of the auto makers are expected to crash 69 per cent.