May 31, 2023

Carmakers Upbeat As Sales Jump In June

By Ashwini Agarwal
First publised on 2020-07-06 17:39:54

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Carmakers have reported a huge jump in sales in June 2020. But this is when compared to the rock bottom figures for May 2020. But since the June 2020 figures are almost 50% that of June 2019 figures, carmakers are upbeat of a quick revival.

Maruti Suzuki India had sales of 13865 units in May 2020. It jumped to 51274 in June. That was more than 3.5 times. Although the company had sold 111014 units in June 2019, given the constraints this year, the sale of almost 50% of that level shows that the market is picking up fast after the lockdown.

Hyundai Motor also reported a similar jump in sales. It sold just 6883 units in May 2020 but the sales jumped to 21320 units in June. Together, both these companies have a 70 percent market in India.

Several reasons are being put forward for the rise in sales despite job losses, salary cuts and income streams drying up. Pent up demand, the desire to avoid public transport and easy availability of finance are said to be the major reasons. Another feature of this rise is that a majority of sales are happening in the rural or semi-rural areas and the demand is for cars running on alternate fuels like CNG.

This proves two things. The economic figures had also shown that the farm sector was doing well. Rural car sales figures now confirm that the distress due to Covid-19 was more in urban areas as the business had come to a total standstill. It also proves that with the price of petrol and diesel rising fast, car buyers will increasingly look for cars that run on LPG or CNG.

It is too early to predict a trend. The real situation will be known only after the figures for July come in. People are postponing purchase decisions due to economic uncertainty. If July figures also show a jump and pre-Covid levels are reached, it will show that the economy is rebounding fast.