Stronger recovery likely in auto sector: Assocham

Industry experts are hoping for an upward trend for the industry with as demand for passenger vehicles picked up in FY21

New Delhi: With the recent announcement of entry of new luxury cars series by brands such as BMW, Jaguar and Tesla, the automobile sector in India is looking positive towards a facelift, with many hoping that the newly-made announcement will reverse the degrowth in the industry. The Society of Indian Automobile Manufacturers (SIAM) on Monday released data announcing the car sales trend within India in the Financial Year 2020-21, stating that the overall segments in the industry performed poorly with passenger vehicle wholesales decline by 2.24 per cent to 27,11,457 units as against 27,73,519 units in 2019-20. Luxury car sales, too, in India fell by about 40 per cent in 2020, their steepest decline.

Deepak Sood, General Secretary, Assocham, told Bizz Buzz," It is true that the top end of the luxury cars has witnessed a drop in volume during March 2021 over the same period last year, but it has more to do with the overall subdued business sentiment in the face of unprecedented global health crisis triggered by Covid-19 pandemic. At a time when the balance sheets of the corporates are facing challenges, most would avoid a buying spree for luxury vehicles."

Industry experts are hoping for an upward trend for the industry as demand for passenger vehicles picked up in the last quarter of FY21.

"On the other hand, the need for personal mobility and relative insulation of industries like IT, pharmaceuticals, speciality chemicals have helped the mid-segments of the passenger vehicles, especially in the SUVs. Overall, the automobile industry, more so in passenger cars, has done reasonably well in the face of pandemic and with estimates of a stronger recovery on the horizon, the overall industry would stand to witness an improved uptake," Deepak Sood said.

In the electric vehicles segment, the Department of Heavy Industry DHI on Monday extended by one year the eligibility certificates issued by testing agencies and approvals for electric vehicles given by the National Automotive Board (NAB) and DHI that were valid till March 31, 2021.Auto industry body Siam termed the government's move to extend the FAME II certification validity by one year as a step in the right direction.