Covid 19 impact on auto sector: April sales likely to decline, says Kushal Gupta

Auto sales are expected to decline in April due to the worsening Covid 19 situation in the country. Lockdown like restrictions in several states, supply constraints and lower demand have all impacted the sales of the vehicles. Market expert Kushal Gupta expects a decline in almost all the segments including passenger and commercial vehicles.

The market expert said that there are no expectations for positive surprises as the consumer sentiment has dampened due to increasing cases of coronavirus in the nation and it is further turning to be a demand dampener for the auto sector.

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The weak consumer sentiments will lead to a fall in sales across all the segments on a monthly basis (MoM). It will not be considered right to compare the situation on a yearly (YoY) basis as it was a complete washout month, if we talk about April 2020, he added.

Talking specifically on the segments, Kushal said that the passenger vehicles and tractor segment will witness a nominal demand.

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He expects that Maruti will report a fall of 8 percent with 1,53,500 units. Mahindra and Mahindra (M&M) can show poor performance on a month on month basis by registering a decline of 33 percent in its total automotive numbers, he added.

In the two-wheelers segment, Bajaj Auto's performance will be relatively less poor compared to that of the other two-wheeler auto space companies. The company is expected to register a fall of a mere 3 percent with 3,21,000 units, the expert said.

Hero MotoCorp will report a 22 percent fall on a monthly basis. While in commercial vehicles space, Eicher and Ashok Leyland are likely to report a fall of 23 to 25 percent, Kushal added.

In the tractor space, M&M will register a 16 percent fall. The market expert concluded by saying that it will be worth watching how the numbers actually pan out as the overall situation indicates a negative impact on the auto sector. He added that because of semiconductors also issues have been faced in the supply chain.