Festive season likely to aid the Automobile Supply Chain

The Indian Automobile sector’s struggle with declining sales started way before the coronavirus pandemic hit the face of the earth. With the outbreak of the pandemic, the already struggling sector was further taken down, so much so that most of the renowned automotive companies registered zero sales.

However, as the country fights to cope up with the pandemic and move towards the new normal, the struggling sector is now getting its hopes back, with sales numbers going up from the earlier zeros.

It is anticipated that the sector will sees a turnaround in the coming months. In light of which, the automakers ahead of the festive season are strengthening their digital presence and ramping up productions.

Also Read: Automotive Logistics India: On The Highway To Recovery

As per reports, the automobiles wholesale rose in August as supply constraints caused due to pandemic ease and companies pushed stocks dealers anticipating an improvement in demand ahead of festive season.

Factory gate shipments for most of the automakers rose in the range of 11-31% month-on-month in August, shows a compiled data from Nomura, Motilal Oswal and Emkay Global. As per the figures, the sales for tractors and passenger cars rose while most two-wheelers and commercial vehicles saw a decline.

According to the analysts, the wholesale volumes of passenger vehicle surpassed the two wheelers only on accounts of an almost flat base of last year. And, the commercial sale remained low on year-on-year basis but improved sequentially.  

Going forward, automakers anticipate that two-wheelers will make a faster and a quicker recovery considering the thriving rural sentiments and rise in personal mobility needs. They further bet on the festive season to see a demand normalisation for cars after a steady slow.

On the commercial segment, while the reports show a sequential improvement, analysts believe that the need for commercial vehicles will remain a bit low as it is the worst hit segment due to the economic recession, excess capacity and lack of drivers.

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