Written By According to data from the Federation of Automobile Dealers Associations (FADA), passenger vehicle sales in March 2021 were 28% higher than the same period in 2019, before the pandemic hit. In the same month, commercial vehicle sales exceeded pre-pandemic levels by 24%.
The revival of the Indian car industry is a positive sign for the country’s broader economy, which has been hit hard by the pandemic. As businesses and industries seek to recover from the pandemic, the auto sector is seen as a bellwether of India’s economic health.
Experts say that the increase in demand for cars is driven by a variety of factors, including a shift towards private transport in the wake of the pandemic, the availability of low-cost financing options, and the launch of new models.
“The Indian consumer is showing an increasing preference for private mobility, and this trend has only accelerated during the pandemic,” says Rakesh Srivastava, Managing Director of Nissan Motor India. “This, coupled with the availability of affordable financing options, has been a key driver of the industry’s growth.”
The demand for used cars has also seen a significant rise, as buyers seek to make cost-effective purchases. According to online used car marketplace Cars24, the company sold over 300,000 vehicles in 2020, a 50% increase compared to the previous year. The company expects to double its sales in 2021, driven by a surge in demand for used cars.
However, the auto sector still faces a number of challenges, including supply chain disruptions and rising commodity prices. A shortage of semiconductor chips, which are used in the manufacture of cars, has impacted production globally and has been a key challenge for the industry in India as well.
Another challenge for the sector is the increasing cost of raw materials such as steel and copper, which has led to a rise in vehicle prices. This, in turn, could impact consumer demand for new cars in the coming months.
Despite these challenges, the Indian auto industry remains optimistic about its future prospects. The sector is expected to continue to grow in the coming years, driven by a combination of rising disposable incomes, increasing urbanization, and the government’s push towards electric mobility.
The Indian government has set an ambitious target of having all new cars sold in the country be electric by 2030, and has introduced a range of incentives and subsidies to encourage the production and sale of electric vehicles. This is seen as a key driver for the growth of the auto sector, with several Indian and global car manufacturers planning to launch new electric models in the coming years.
The revival of the Indian auto sector is a positive sign for the country’s economy, and reflects the resilience and adaptability of the Indian consumer. As the world continues to navigate the challenges of the pandemic, the Indian auto industry’s success is a testament to the power of innovation and the enduring resilience of human endeavor.
