- The automobile industry is one of the worst-hit industries due to the Covid-19 pandemic and this industry will experience crucial changes in the buying behavior of the customers across the world.
- The effect of the pandemic would significantly impact the preferences of the clients and there are high chances that many potential clients will now focus more on hygiene, health, and cleanliness during traveling and they may choose personal forms of transport rather than traveling in shared transport, as the chances of getting in contact with any kind of virus would be more in shared transportation.
- The financial years 2020 and 2021 can be regarded as the testing times for the automotive sector because of negative buyer sentiment, switch from BS-IV to BS-VI compliant engine, and moderate economic development.
- Another reason for the slowdown in the automobile sector is the confusion regarding the policy on electric cars, the government told a parliamentary panel
- NITI Aayog had proposed to ban the sale of three-wheelers with internal combustion engines by 2023 and two-wheelers with engine capacities less than 150 ccs by 2025.
- The 150-cc and below segment form almost 90% of the two-wheeler market in the country.
- The industry termed the proposed NITI Aayog plan “unrealistic” while knocking on the Centre’s door pitching for an EV roll-out road map over a “practical” time frame.
- The government of India had clarified at many forums that it did not intend to ban the sales of vehicles powered by fossil fuels, but the confusion added to the already low consumer sentiment.
Some of the important reasons that attributed to the auto slowdown are:
- Auto sales were down because of the “curtailment” of automobile loans that so far were easily available.
- The sharp increase in road tax in many states had added to this problem.
- The switch from BS-IV to BS-VI engines for improved emission standards has also led to the slump due to the increased cost of production.
As the buying capacity of the customers is expected to tighten for a brief period, due to the irregularities in payments and many have lost their jobs due to the pandemic, it is significant for most of the car manufacturers to re-strategize their existing strategies and come up with attractive discounts, financial options, cash benefits, and other attractive offers. Along these lines, the original equipment manufacturers and dealers can improve the sales of the vehicles.
Today all the information relating to the vehicle is accessible online, for example, the brochures of the car, owner’s manual, 360 degrees VR showroom, and so on. In many countries, most car sales are happening online and even the car manufacturers and dealers in India are now focusing more on online advertisements. The car buyers are also getting increasingly aware & acclimated with buying the vehicles online. Many dealers are also encouraging car booking and digital payments to eliminate the risk of physical contact. Through these means they are able to digitally connect with the potential buyers, thereby demonstrating better approaches for doing business.