News By/Courtesy: Nandakishore A | 20 Sep 2020 21:46pm IST

HIGHLIGHTS

  • As the festive season will soon dawn upon us, it is expected to grant a temporary relief to the whole of auto-industry as their sales are predicted to go up.
  • The dip in sales is due to the increasing job losses due to the current pandemic.
  • The relief which is expected to come to the auto industry is labelled as temporary as it is only predicted to last for a few months.

The Auto Industry has been hit predominantly along with most of the other industries in this current pandemic era we are living in. Nearing the end of the year, as the festive season will soon dawn upon us, it is expected to grant temporary relief to the whole of auto-industry as their sales are predicted to go up. But the original equipment manufacturer's continued disproportionate wholesale billing is bound to cause more stress to the manufacturers and dealers in this space if uptake is lower than what is expected.

India Rating and Research (Ind-Ra), on Friday, in its latest report, foresees that the sales in the automobile sector are continuing to shadow behind the original wholesale sales in September 2020, even though there has been a month-on-month rise in sales after the complete fall out in April. The original equipment manufacturers (OEMs) are expecting a revival in retail demand during the upcoming festive season after seeing the prospects of a robust Kharif harvest. Reports have also led us to conclude that sales will most likely remain sluggish in the month of September, mainly on the retail side, due to the “inauspicious period of Shraad”.  Even though the number of wholesale sales cloud over the retail sales, two-wheeler and passenger vehicle’s retail sales fell 7 percent and 29 percent respectively.

The dip in sales is due to the increasing job losses due to the current pandemic, just like how it has affected all other industries, the same has happened to the auto industry as well. The relief which is expected to come to the auto industry is labeled as temporary as it is only predicted to last for a few months. Furthermore, what could help this sector more is additional measures which are taken by the government such as GST cuts and the incorporation of scrappage policy. OEMs have increased production due to depleted inventory issues and supply chain issues at the dealer level, the increased production will be necessary for the upcoming festive season.

 

 
This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.

Section Editor: Pushpit Singh | 22 Sep 2020 7:18am IST


Tags : Auto industry, Festive Season, Cars, Sales, Retail, Wholesale, Pandemic, COVID-19, Unemployment

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