Economists predict that the decline in two-wheeler sales will adversely affect future car sales. “One would buy a motorcycle or a scooter first. Then move on to entry level cars. Many people switch to luxury cars after driving entry level cars for a while. There is no doubt that the decline in two-wheeler sales will adversely affect car sales, ”said Shailendra Kumar, CIO, Narnolia Securities.
Two-wheeler makers Hero, Bajaj Auto and TVS Motors all sold 5 million fewer vehicles in April-August 2021 compared to the previous year. If this trend continues, only 1.19 crore vehicles will be sold in 2021. In 2019, 2.12 crore two-wheelers were sold. Sales are expected to fall 44 percent this year.
SIAM has been monitoring sales of two-wheelers in the country since 1995. The financial crisis in the US in 2008 also adversely affected the Indian market. Two-wheeler sales fell 7.9 percent in 2008. But next year sales returned to normal.
But in the current economic climate, it is estimated that it will take several years for sales to double. Growth in 2019 can only be sustained if sales grow by 77%. At the same time, sales, including luxury cars, grew by 1.2 percent in 2021. This is due to the boom in the IT, banking and insurance sectors during the Kovid period.
According to Shailendra Kumar, layoffs in such areas were low during the Kovid period and there was an increase in the salaries of the employees. So there were no major problems with car sales. But Maruti Suzuki says sales of entry-level cars are low.
Kovid and economic inequality
Economists say Kovid restrictions have led to a huge widening of the rich-poor gap in the country. According to a report in India Today, the rich leave the country when the middle class and the poor struggle for treatment. The super-rich escaped to Europe and the Gulf countries on private jets for millions of rupees. Oxfam, an international agency, had earlier reported that the Kovid era had dramatically increased the wealth of the country’s 100 richest people. Wealth has increased to the extent that it can provide Rs 94,000 each to 138 crore poor people in the country.
[Compiled by അനീബ് പി.എ]