Steel demand from the downstream industries is surging as the unlocking measures announced by the government are in various stages of implementation, thereby facilitating manufacturing activity.
Vehicle sales have registered a steady growth with retail sales in the passenger vehicles (PV) segment witnessing sharp recovery: PV sales, remarkably, dipped just 7% to 178,500 units in Aug’20 from the preceding year.
The recovery indicates a slowdown in the influence of the pandemic on the domestic car market. Aug’20 PV sales show double-digit acceleration.
Two-wheeler sales dropped 29% to 8, 98,775 units from a year ago, while three-wheeler and commercial vehicle sales declined 70% and 58% respectively.
Owing to the monsoon and better rural sentiments, retail tractor sales increased by 28% to 64,706 units compared to last year.
In fact, this sales upsurge must be viewed as a 31.57% y-o-y decline against PV sales in Aug’19, due to various economic factors adversely impacting demand.
However, last month’s recovery indicates a decrease in the influence of the pandemic on the domestic car market.
India’s top two carmakers – Maruti Suzuki and Hyundai Motors – reported y-o-y growth of 21.3% to 113,033 units and 20% to 45,809 units respectively that were dispatched to PV dealerships in India.
Demand crawls back in urban areas
Aug’20 witnessed decent demand for new cars in urban areas since the lockdown triggered by COVID-19. Besides the rural markets that were exhibiting revival symptoms all the while, urban centers, for the first time, showed initial signs of demand pullback.
Brakes on sales decline
Numbers in the table (below) show that the rates of decline in most vehicle segments are slowing down, albeit gradually. Aug’20 figures are an improvement over Jul’20, but that was to be expected, considering the festive season around the bend.
M-o-m sales improved with the government’s priority spending on rural development and agriculture. Aug’20 sales of tractors, small commercial vehicles and entry-level passenger vehicles got a fillip, thanks to a good monsoon and healthy sowing season.Barring short-term jolt to demand, there is expectation of sustained demand recovery, with retailers hopeful of increasing sales in Oct’20 & Nov’20 ahead of the upcoming Navratri and Diwali festivals.
Vehicle Sales in August 2020:
| Category | Aug’20 | Aug’19 | Change YoY | July’20 | Change MoM |
| Two Wheelers | 8,98,775 | 12,60,722 | -28.71% | 8,74,638 | 2.76% |
| Three Wheelers | 16,857 | 55,293 | -69.51% | 15,132 | 11.39% |
| Commercial Vehicles | 26,536 | 62,270 | -57.39% | 19,293 | 37.54% |
| Passenger Vehicles | 1,78,513 | 1,92,189 | -7.12% | 1,57,373 | 13.43% |
| Tractors | 67,406 | 52,744 | 27.80% | 76,197 | -11.53% |
| Total | 11,88,087 | 16,23,218 | -26.81% | 11,42,633 | 3.98% |
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