Decline in sales ring alarm bells in automobile industry


The Covid-19 pandemic has affected the income of middle-class households.

Reports state that automobile sales in India decreased in the fiscal years 2020 and 2021 compared to 2019 with the onset of the Covid-19 pandemic. .

With over 295 million registered vehicles in 2019, India’s automotive business was one of the world’s largest, report states. In 2019, it was the world’s largest maker of two-wheelers. This sector also dominated the market within the country. Prasanna*, Bajaj’s Sales Manager, AMBA Bajaj, HSR Layout Bangalore said, “We used to sell around 180 to 200 units per month in 2019, but after COVID-19 pandemic,   Roughly half of our sales dropped. Mostly, our sales depend upon the new modifications that come with the bikes each year. The changes had affected approximately 20 percent of our sales. For instance, Pulsar NS 200 sales have decreased a lot. For the last few months, only four to five per month have been sold. People keep on asking for the old colours, especially white and magenta.” 

Since most organizations shifted to work from home, the demand for perseonal vehicles was less. Rajesh, a resident of Indira Nagar, Bangalore, said that he worked from home throughout the pandemic. Moreover, he did not receive his salary regularly during the lockdown. So he could not spend much to upgrade his vehicle.

 Data from Statista says that sales of two-wheelers  declined in financial year (FY) 2020 and FY 2021 following a steady climb from FY 2011 to 2019. Sales were at 11.8 million units in FY 2011 and continued to rise until FY 2019, when they reached 21.18 million units. After 2019, it dropped to 17.42 million units in 2020, and 15.12 million units in 2021.

Suman*, sales manager, KTM Langford, Richmond Circle Flyover, Bengaluru said that the pandemic, our sales have been pretty much on and off. Sometimes we sell more, sometimes its very liitle. At most, we sold around 20-30 bikes per month. Recently, we have been seeing a slight increase in our sales.

According to the, sales of three-wheeler automobiles in India have declined in FY 2020 and FY 2021 following a steady climb from FY 2011 to 2019. Sales peaked at 15.51 million units in FY 2011 and continued to rise until FY 2019, when they reached 26.28 million units. In 2019, it dropped to 21.5 million units in 2020 and 18.62 million units in 2021.

Additonally there are some operational problems with the auto-rickshaws that have contributed to the decline in sales. According to Section 74 of the Motor Vehicle Act 1988, an auto rickshaw can only travel with passengers for 15 kilometres inside the city limits. And can only pick up three individuals by travelling.

Venkatesh, an auto rickshaw driver, said that during the pandemic he had faced a lot of trouble as there was no business. “Before buying my own auto, I used to drive for other people.”  His auto is around seven years old. He has been driving for a long time. “This auto is my livelihood. I used to earn Rs. 500 to Rs. 1000 per day before the pandemic, which decreased to Rs. 200-Rs. 500, also irregularly. Just before the pandemic, my brother-in-law bought a new auto, but now he is facing a lot of problems in paying the installments,” he added.

A reportfrom 2019,stated that the transport sector in India accounted for 4.85 percent of the India’s gross domestic product (gdp), with road transport contributing to over three percent of it.  

Krishna Raj, Professor, Centre for Economic Studies and Policy (CSEP), said,”The sales decreased as there was no demand for auto-rickshaws during the COVID times as there was very little movement and it affected transport and service industries, which decreased the demand for auto-rickshaws. The income of the middle class and lower middle class has been affected by the pandemic, which indirectly affected the sales of two-wheelers. The automobile industry contributes a lot to the country’s economy, so the decrease in sales in this sector will affect the economy.”