Car buying in India has always been a complex series of decisions. These are based on innumerable factors, a few of which are the car itself, its features and the pros and cons. The buying decision also includes what the neighbor bought, what colour the pundit said and the TV advertisement grandma loved.
Has Covid-19 already affected buying decisions?
But now, things might change. We are already in the fifth week of lockdown and money, in most cases has either dried up or on the verge of it. Since transport is also locked, agro-produce, the backbone of our economy, isn’t reaching the market. Which means there are no hopes of a market revival till the next crop is out post monsoon. That is even if we manage to defeat the COVID-19 pandemic.
The cumulative disposable income in the Indian economy will be at its lowest in the past two decades at least. The immediate effect would be that big-ticket purchases like cars will be shelved right away. Even those who always wanted to buy their first car, may ideally wait it out or buy something small and just enough to serve the purpose.
Will that bring back the small car back in to the numbers game? Over the last ten years, India’s love for the Maruti Suzuki Alto slowly graduated to the Maruti Swift and the Suzuki Baleno. But COVID-19 might just reverse it. Maruti Suzuki has one of the most comprehensive portfolios of compact cars. Hyundai too has at least one car in each segment starting from the Santro and will be counting on them to rake in the numbers. Nissan’s budget-arm Datsun, might want to reinvent itself into contention. At the same time, Renault will be raring to go with the new Triber, upcoming Kriger SUV and the Renault Kwid.
The RBI has already announced a reduction in its rates to improve liquidity and banks. NBFCs might come up with attractive packages for car buyers. Car manufacturers with their finance subsidiaries will already be thinking about new offers for car purchase and leasing. But with increased defaults expected post-COVID, will the banks have enough firepower to take further risks?
The rise of ride-hailing and ride-sharing services had cast aspersions on the myth of car-ownership. You need not worry about parking, maintenance, fuel or driving or paying the EMI and still have a car whenever you want, just a click away. But in cases like this lockdown, when all-cabs are banned, the need of owning a vehicle might be felt, especially in the case of emergencies.
This might lead to car-buying but not necessarily be new car purchases. The used car market in India is almost twice as big as the new car market. Used car dealers will certainly have enough stocks to cater for the spike in demand even in its entirety.
Well, there could be a lot more scenarios. We would want to know what our readers think about how car buying would change post COVID-19.