August 1, 2021 1:42:32 am
Going by the auto sales in the first six months of calendar year 2021, auto analysts forecast that the passenger vehicle (PV) segment could touch the CY19 levels by the end of this year.
Even if that happens, it would not be right to say that PV sales have returned to health as calendar year 2019 wasn’t a great year for the industry — PV sales in that year had declined 12 per cent to 29,36,839 units, from the all-time high of 33,49,386 units in CY18.
Even as PV sales plummeted to 88,045 units in May 2021 due to the Covid-19 second wave, the overall January-June 2021 sales were 14,30,184 units, a lakh units below the 15,28,233 sold in January-June 2019. Som Kapoor, partner, automotive sector, EY India, said he is cautiously optimistic whether or not PV sales can match CY19 levels. “The optimism stems from the fact that CY19 sales were low. Also, there is some pent-up demand right now, especially in urban markets, and so matching 2019 levels may not be difficult.”
“But I am also cautious because the Covid-19 second wave has hit closer to home, and many households ended up spending a lot of healthcare, so the willingness to spend on discretionary items such as PVs is lesser this year. On top of that, people are anticipating a third wave. Instead of buying a car, they may want to save cash,” he added. The PV sales forecast trend for CY21 by IHS Markit points to the fact that in July-December 2021 PV sales could beat 2019 levels.
Gaurav Vangaal, associate director, IHS Markit, said, “While trends indicate that H2CY21 sales would be better than both in 2020 and 2019, the global semiconductor shortage could be a challenge to the supply side, and a possible third wave could be a risk to the demand side.”
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