Friday, April 23, 2021
By CarKhabri Team
3 Reasons That Affected Car Sales During COVID-19: IBB Report
The Indian Blue Book (IBB) which is regarded as one of the most authentic guides for the Indian auto industry in its recent report has stated that it is one of the highly affected industries during the global pandemic COVID-19. The report gives deep analysis of the reasons which affected the car sales of both the new and used car sales due to the spread of coronavirus. The reports there are three reasons behind the dip in the sales of cars across the country in this pandemic.
Budget: With the beginning of Financial Year 2020-21, the Indian car industry underwent the process of transition from BS IV to BSVI, which directly impacted the cost of manufacturing and the cost of cars. The arrival of the global pandemic at the same time acted like putting the petrol in fire. With increasing cost, the potential customers who were looking to buy their first car according to their budget, shifted them towards the used cars. The trend of online car sales and the wide options of selection according to brand and budget were additional factors which shifted the prospective buyers to used cars.
Limited Operations: The nationwide lockdown from April 2020 in the entire nation and its further extension almost in all the states, stagnated the production activities of the car manufacturers. As a result of this the car makers had very less time to resume their production activities with the same efficiency to meet the demand the supply chain affected the car sales. According to the report, as an impact of lockdown it took almost six to seven for the carmakers to revert back to their regular operations.
Difference between Demand and Supply: The report states that with lockdown across all the countries across the world also affected the trade within the countries. This affected the supply of raw materials that were exported from the other countries by car manufacturing companies in the country. Moving ahead the shortage of semiconductors further affected the supply and demand. The lack of spare parts had an equivalent impact on the production of vehicles. On the other side as the market of used cars did not have any impact of all these issues, the sales of new cars lowered.