Covid-19 changed the rules of mobility. Now that more and more people want to use the private car as a means of transport, car manufacturers are seeing an increase in demand for small four-wheel drive vehicles.
But SUV manufacturers are relaxed by the general trend of decline (a growing preference of newcomers for small cars). They believe buyers will continue to spend on more expensive models, albeit with some delay.
Shashank Shrivastava, executive director of sales and marketing, Maruti Suzuki India, speaks: All research reports point to a downward or declining trend in the segments.
Those who have bought a luxury car can accept a high-end mass model, while those who consider a high-end model can choose a small car or a used model, Srivastava explains, adding that overall demand may not run out, but there could be a downward shift.
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In his view, accessibility will be the most important motivating factor. However, he adds that these are initial trends and that there is no evidence to justify the hypothesis.
Shrivastawa expects that the number of new buyers – now over 50 percent – will continue to grow, even if replacement buyers wait.
Hyundai Motor India also showed an impressive grip on small cars. The orders for the i20 and Neo are better than expected, according to Taroon Garg, Hyundai’s Director of Sales and Marketing. However, he hastily added that although someone saw a good response, one could not be very sure of the feasibility of these figures. As far as you know, this may be due to an unsatisfied demand in the past month and a half, Garg said.
Car companies stopped selling for just one month in April. After resting in some parts of the country, the shops and factories only started working again two weeks ago. However, most work with a third of the power.
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Experts agree that as cars become a necessity rather than a luxury, small cars have the advantage of having a driver’s seat.
The strong demand for private transport, combined with the current economic scenario, will boost sales of small cars, says Rahul Mishra, director of the consultancy firm AT Kearney. Buyers should generally decline, Mishra said. However, it is possible that the buyer may prefer the model equipped with the appropriate features. The only difference is that they will be more willing to negotiate, he says.
The Indian passenger car market should shrink significantly as a result of the current economic uncertainty that has replaced the current blockade, says Puneet Gupta, deputy director of IHS Markit, a sales forecasting and research firm.
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The IHS estimates that the number of small cars will fall by 20% over the next 18 months, while the number of recreational vehicles (SUVs) will fall by a further 32%.
But SUV manufacturers do not fully understand the original trend. This is an unprecedented situation. We have no previous experience, says Manohar Bhat, sales and marketing manager at Kia Motors India.
Also, the buying behavior does not change so fast, he says, adding that Kia did not see the cancellation despite the gloominess. Of the 1,000 rooms booked, only 200 were cancelled, according to the South Korean car manufacturer.
Hyundai also welcomes the safe for reservations in Crete. More than 21,000 units have been ordered from a South Korean car manufacturer.
Others, such as Gaurav Gupta, sales manager of MG Motor India, remain optimistic about the power of off-road driving. The story of the growth of SUVs continues. But industry as a whole will shrink, with the rate of growth of gross domestic product falling far more than expected.
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Gupta admits that although buyers have been much more cautious, cancellations have been less important than bookings.
Our immediate priority is to produce and deliver more cars to those on the waiting list, he says. The big problem is meeting demand, he said, because only a third of the company’s distributors are open and the supply chain has been broken. He’s shut down production.