The relentless escalation of COVID-19 in India has required state governments to impose lockdown, thus forcing vehicle manufacturers to temporarily bring down the shutters at their plants from the end of April. This is reminiscent of the situation in the second half of March last year.
In view of the current situation, LMC Automotive has slashed the sales and production forecasts of light vehicle sales by 305,000 units. Light vehicles include passenger vehicles (PVs) and light commercial vehicles (LCVs) up to gross vehicle weight (GVW) of six tonnes.
In its latest report, LMC has revised India’s 2021 light vehicle sales outlook to 3.9 million units, down 7.4% from the previous outlook of 4.21 million units. On the other hand, the 2021 production forecast has been adjusted to 4.49 million units from its earlier estimate of 4.79 million.
The cuts in May and June were more pronounced but were partly offset by a stronger outlook for August-December, when catch-up demand and improvements in the supply chain should boost volumes, LMC said in the report.
Ammar Master, Senior Manager, Asia Pacific Vehicle Forecasts, LMC Automotive said, “We cautiously assume that the rate of infections will subside by August-September, further aided by the improved supply of vaccines.”
India’s automotive industry rebounded rapidly after last year’s nationwide lockdown was lifted, and that strong sales momentum carried through to the early part of this year.
Since end-April, however, the recovery has been derailed by the devastating spread of the pandemic. Buyer sentiment has tanked; dealerships are shut in areas where containment measures are in place, and plants are being suspended.
Around 15 out of a total of 37 states and union territories are under lockdown including the Delhi National Capital Region, as well as the states of Haryana, Maharashtra and Tamil Nadu, home to the country’s automotive production hubs.
Experts tracking the industry are expecting the market to rebound by the festive season and eyeing the revival toward the end of 2021. However, they also indicated that it also depends upon the supply chain restoration and supply of chips or semiconductors.
The apex body of dealers, FADA is expecting a complete recovery only by 2023 for all segments.