December 4, 2020

Current leap in auto gross sales could also be attributable to pent-up demand, not sustainable: MG Motor India



New Delhi: The restoration seen in auto gross sales up to now couple of months just isn’t a sustainable one and there’s a query mark on how the trade would fare subsequent 12 months because the sector is massively linked to the economic system, in keeping with MG Motor India President and MD Rajeev Chaba.

Following the reopening of the economic system after lockdown, auto gross sales have step by step picked up month on month since June and gained additional momentum with the onset of festive season in September.

“We should always not assume it is a sustainable restoration. This restoration may be very tactical due to pent-up demand, due to lockdown, due to some shifting from public transportation to non-public transportation and possibly some only a few individuals who simply wish to purchase vehicles now as a result of they wish to have some really feel good issue,” Chaba informed .

He mentioned the market is coming again to final 12 months’s stage in August and September though the April-June quarter was a wash out.

Nonetheless, Chaba mentioned, “That is all tactical however sustainable demand or the strong demand will depend on the economic system. Automotive trade is massively linked with the economic system of the nation and vice versa. Auto trade helps the economic system and the economic system helps the auto trade.”

Gross sales in September, October, November and December shall be nice however nonetheless trade shall be down by 23-25 per cent general for the complete 12 months, he mentioned including, “From January onwards, it is going to rely on the robustness of the economic system and the positivity of sentiments and certainty round (COVID-19) vaccines, and possibly authorities’s stimulus additional to the economic system and could also be to the auto trade as effectively.”

“That is why I’ve my fingers crossed from January onwards,” he added.

Some automakers had mentioned that there are ‘inexperienced shoots of restoration’ within the trade based mostly on the efficiency in September, when auto majors Maruti Suzuki, Hyundai Motor led the restoration march of passenger automobile (PV) gross sales within the home market posting excessive double-digit progress.

Tata Motors, Honda Automobiles India, Skoda Auto India, Kia Motors India additionally witnessed strong improve of their September gross sales. Whereas corporations like Mahindra & Mahindra and Toyota Kirloskar Motor noticed decline in gross sales, they mentioned demand is choosing up and there’s a lot extra confidence within the sellers.

The producers are banking on festive season demand to hold ahead the momentum.

Commenting on the MG Motor India’s place, Chaba mentioned for the reason that gradual lifting of the lockdown, the corporate has been inching up in the direction of normalcy.

“We’re virtually 80 per cent of pre-covid ranges by way of normalising the availability chain in addition to demand. Fortunately we nonetheless have some orders and we’re in a position to do round 3,000 vehicles a month proper now. By way of demand, it’s virtually pre-covid stage for us,” he mentioned.

He additional mentioned, “We nonetheless have round 9,000 orders for each Hector and ZS EV. So hopefully by October by way of provide chain, it ought to be fairly regular, until COVID-19 performs by itself and it deteriorates. In any other case, we’re on the trail of excellent restoration.”