Driving in the Age of Corona: The Future of The Indian Car Market
Since the lockdown to combat Covid-19 started in March, most major sectors in India had been shut for over two months. The biggest impact has been felt on sectors like travel and tourism, hospitality, automotive, and financial markets. Public transportation, in particular, has taken a huge hit owing to the social distancing norms and the wariness of the general public. Due to safety concerns, people prefer their private vehicles for travelling. So how has this impacted the automobile sector in India? Let's take a look.
The Indian Automobile Industry
The Indian automobile industry is estimated to be the fourth largest in the world by 2021. India is also the world's second largest manufacturer of two-wheelers. (Article by Your Story) This means a large supply chain starting from procurement of different raw materials like metals, plastic and glass, to different manufacturing units all over the country. Since most car manufacturers have raw material sources based in China, the pandemic brought the Indian automobile sector to a grinding halt.
Present state of the Automobile Sector in India
Even before Covid 19, the car industry in India had been struggling - with many major automobile factories and plants ceasing operations. The sale of passenger vehicle went down by roughly 18% in FY19-20. Now, owing to the coronavirus, the automotive sector is also facing a huge drop in demand. In fact, the Indian car industry saw its largest slump in recent times in the last quarter.
But all isn't lost just yet. With companies across the globe looking for alternate sourcing channels, India has a massive opportunity. By increasing the level of manufacturing efficiency and upgrading supply lines to global standards, the Indian automobile industry can cash in on a huge market share of Chinese suppliers.
The new norm for the Indian car industry
As many car companies have opened dealerships in non-containment zones, it will be interesting to see how the car market copes with the new normal. Social distancing norms have surely driven consumers to think of buying automobiles rather than use public transport. The car buying experience is definitely set to change though. Instead of visiting multiple dealers for test driving various models, customers are making decisions virtually. People are likely to choose popular models, and companies should try to make end-to-end virtual assistance possible.
Pre-owned cars and automobile-leasing
The used car segment is highly likely to benefit from the rising need for private vehicles and the economic uncertainty. Demand for pre-owned cars has already seen a rise in the last month. The country's largest automobile manufacturer - Maruti Suzuki also considering leasing out vehicles through dealership networks across the country. Many others, like Hyundai Motor India Ltd and Mahindra and Mahindra Ltd (M&M) have already started their leasing services.
Owing to the cost efficiency of car leasing, many firms and small medium businesses have begun showing interest in leasing automobiles for employees. With the right digitisation technology and virtual support, car-leasing companies could be the answer to the doubts and worries of modern consumers in the post-corona age.
Easy monthly lease rentals, combined with remote assistance surely seem like the way to go for many consumers who don't want to invest in buying a car right away. Not having to bear the added burden of erratic maintenance and repair costs is an added plus - further mitigating customer worries. A lower taxable income, 24x7 roadside assistance, easy upgrades and insurance cover - these are some of the many benefits of a car leasing service like ALD Ugo.
To know more about the benefits of ALD Ugo and other useful information, feel free to head to www.aldautoleasing.in/ugo