India: Automotive sales impacted by Covid-19

Government measures, OEM investment and new model launches lead to recovery of market

2021/03/15

Table of contents

Summary
Downfall of passenger cars sales in 2020
Government stimuli for automotive industries
Medium-term trends in the passenger car market
Passenger car market segment structure
OEM analysis of the passenger car market
New OEMs development in India
Plant and R&D center related investment plan
Sales Forecast by LMC Automotive: Indian light vehicle sales to below 4 mn units before 2024

Summary

Passenger vehicle sales in India
(Source: MarkLines Data Center)

2020 was a roller coaster year for the Indian car market. In 2020, India's passenger vehicle industry reported its poorest performance in recent years but towards the end of year, sales returned to normal. The main factors for poor performance were lack of consumer sentiment, an increase in purchasing costs, volatile fuel prices, tight liquidity, BS-VI norms and the impact of Covid-19. Covid-19 pushed sales to a historical low in the middle of the year. The government announced several stimuli for industries in the wake of Covid-19 with the expectation of boosting the automotive industry.

This year also witnessed the emergence of new OEMs, and connected and electric vehicles in India. The boost in the agriculture market, new model launches, as well as better offers and vaccination programs are expected to boost the market after historical low of sales due to the Covid-19 lockdown. However, towards the end of year, the semiconductor crisis and supply chain issue threaten to pull the sales back into negative territory.

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