The second wave of COVID19 has had a huge impact on the automotive industry. A rapidly spreading coronavirus, as well as lockdowns imposed by various states, have hurt consumer sentiments and dented demand. But as cases fall and states continue to reduce restrictions, sales are expected to recover as consumer preferences shift towards personal mobility amid the need for social distancing.
According to data from the Society of Indian Automobile Manufacturers (SIAM) 88,045, passenger vehicles were sold in May, which is 61 per cent lower than sales reported in May 2019.
Hyundai, the second-largest carmaker in the country, expects passenger vehicle sales in June will be three-quarters of normal monthly sales.
“As we see it today, around 80-85 per cent of the markets are now open. It's only 10-11 days since markets started opening up. So, while it's early times, what it appears is probably in June, the industry will end up with 72-75 per cent of the normal demand. This is quite good, because in May we were, in terms of retail, only about 25-30 per cent of the average demand,” Tarun Garg, director, sales and marketing said on Friday.
The average industry volume is around 270,000 units monthly and volumes in June should be somewhere over 200,000 units, he pointed.
Garg was speaking after the launch of Hyundai’s premium SUV Alcazar. The Alcazar price starts at Rs 16.30 lakh ex-showroom and it is the fifth SUV in the Korean car maker’s product portfolio in the country, which includes the compact SUV Venue, mid-size SUV Creta, the high-end Tuscon and the electric Kona. These diverse offerings have helped Hyundai gain market share and become the largest SUV player in India.
“We finished calender year 2020 as the number one SUV maker with a 25 per cent market share. We are maintaining that 24-25 per cent level this year also in the January-May period and we maintain the leadership as well,” said Garg.
The new launches by Hyundai and other automakers like Kia, which is a sister company of Hyundai, and MG Motor, has helped accelerate SUV demand in India. In 2020, SUVs contributed to 29 per cent of the overall market, and the contribution has further increased to 35 per cent in the first five months of 2021, according to Garg.
The strong demand, coupled with supply-related bottlenecks due to COVID-19, has led to long waiting lists for popular SUV models in the country. There is a waiting period of around 4-5 months currently for the highest-selling Creta, while the Venue also has a waiting period of 8-10 weeks. Even for the initial bookings of Alcazar, the company has projected a waiting period of 4-8 weeks.
A semi-conductor shortage, in particular, has hit automakers globally. But, Hyundai is hopeful of keeping up with demand and reducing the waiting period over time.
“Semi-conductors is a global issue. Hyundai is as much impacted as the global OEMs. Demand (in the domestic market) is coming back and gradually as markets are opening up, production is also ramping up. We are hoping that in times to come, we should be able to reduce this waiting period, going forward,” said Garg.
