2-wheelers, passenger vehicles seeing resurgence in inquiries: Motilal Oswal

New Delhi: Leading automobile industry channel partners say that two-wheelers and passenger vehicles are seeing a resurgence in inquiries but commercial vehicles are seeing negligible demand amid the Covid-19 led lockdown, according to interactions done by Motilal Oswal Financial Services.

While the demand for two-wheelers and passenger vehicles is seeing some recovery from semi-urban and rural markets, commercial vehicles have minimal demand due to low economic activity and cautious financiers as many operators have already opted for the moratorium.

Also, financiers currently are stringent and highly risk-averse in lending to commercial vehicles and three-wheelers, said Motilal Oswal Financial Services on Friday.

In May, wholesale volumes are estimated to decline by 77 per cent for two-wheelers, 77 per cent for passenger vehicles and 90 per cent year-on-year for commercial vehicles due to the lockdown and low demand.

Tractors volumes are expected to decline by 71 per cent year-on-year. After almost zero sales in April due to the complete lockdown, the Indian auto industry has restarted operations (both plants and dealerships) partially even as it adheres to new operating norms.

For April, most original equipment manufacturer plants were operating at less than 30 per cent average utilisation while less than 50 per cent dealer outlets were operational (except tractors which had 60 to 70 per cent operational dealerships.

“The rabi crop has been very good and farm incomes will be higher as a result. The effect of COVID-19 seems to be more in urban clusters than rural areas. So, that part is also positive,” said Shashank Srivastava, Executive Director for Marketing and Sales at Maruti Suzuki.

“The negative is that some urban activity-led income, which used to go back to rural areas through migrant labourers, will be a little impacted. Rural sales will bounce back quicker,” he said in Motilal Oswal sector update. (ANI)