Brickwork Ratings: After the second wave, the auto industry may see a quick recovery

in image Automobile vehicle illustration

in image Automobile vehicle illustration

DELHI: According to research by Brickwork Ratings, India's automotive manufacturers may see a quick recovery in car sales as states emerge out of lockdown as a consequence of a gradual drop in Covid-19 cases.

In May, auto sales dropped as manufacturers and showrooms were closed due to the pandemic's second wave.

The credit rating agency said in a report ", Overall automobile sales are expected to decline in Q1FY22 due to Covid-19-led disruption in the supply chain and an underlying slowdown in the economy. However, demand for personal mobility remains resilient and is expected to strengthen after the second wave of the pandemic".

During the period between March and April, a recent increase in the number of coronavirus infections led to numerous governments imposing locks, from Maharashtra to Delhi, Haryana, Karnataka, and Tamil Nadu.

Maruti Suzuki, Hero MotoCorp Ltd, Hyundai, and others either drastically discontinued manufacturing or drastically cut output. However, others such as Bajaj Auto continued to operate with limited export capabilities. After a gradual decline in infections, particularly in India's north and south, most car manufacturers restarted operations in mid-May.

"Continued supply chain constraints and the rising cost of vehicle ownership would lead to a subdued recovery momentum shortly. Full-year recovery prospects are intact due to pent-up demand, but they also hinge upon the progress of the vaccination drive and easing of input supply and prices," the analysts added.

Source-mint

 

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