AUTO PUNDITZ
  • Team Auto Punditz

Top 5 reasons the car Industry will grow, despite the recent lockdown. [ V-shaped recovery]

For all those of you who are uncertain about the post lockdown business scenario. this should give you a lot of confidence. The fundamentals of growth in the car industry are in our favor. Needless to say that the growth forecast continues to remain positive despite the lockdowns and also base foundation of the economy continues to remain strong, the local consumption still remains fairly hungry and ready to consume, and most importantly personal mobility will now not remain an aspect of luxury, rather it will be a necessity moving forward.


Basis our understanding of the previous lockdown situation and the current trend globally with regards to the auto industry, it's evident that there is a huge pent-up demand which is rearing to go. Yes, they may be interested in buying their new car, but this time it's going to be even more challenging to appeal to them. Customers now are going to be more value-oriented buyers than the last time's panic buyers, they will look for better deals, they also don't find the need to be brand loyal and most importantly they are not going to make the same number of showroom visits to buy their cars, now they would go totally digital.

Below, are the top 5 reasons why we believe the car market will bounce back strongly.

  • Car buying will be a necessity.

We have already experienced it during the previous lockdown, but this time the demand is going to be better, we will see more customers insisting on personal mobility as a necessity rather than just an option. We will see more customers insisting that they are personally safe and would prefer to travel alone. Car buying would no longer be considered a luxury.

  • Retail Finance will focus on Car buying

We all know the high volatility the current retail finance business is facing. The real estate prices are on the spiralling drop once and again seem to regain some ground and again the volatility continues so is the case with other retail finance products. The only stable priced and safe investment with a considerable consistent return would turn out to be car finance.

  • Increased government spending+Consistent Monsoon

The government did not shy away last year and is not shying away this year from public expenditure spends and infrastructure spends. To this add a more favourable monsoon and we will have decent money in the hands of the public, especially the rural customers to buy cars.

  • Low base

Since we are talking about growth, it's worth remembering last year wasn't the best of the years for all of us. We had consistent constraints throughout the year which lead to rather low wholesale figures across all OEMs. Be it the chip shortage, lockdowns, logistical challenges or issues at vendors, we had it all accumulated across the year. This year we may have challenges, but we are more prepared to handle them.

  • Pent up demand+Better Offerings from OEM.

Of course, we have experienced this in the past, every time we see a drop in the volume it is going to be supported with a spring jump in the customer's interest in cars. To this, if we add the right digital tools along with high-value offerings, we are bound to make a deadly recipe for a great positive outlook.


So, if you are in the auto car business, then it's obvious that you prepare yourself for a healthy come back to post the lockdown. If you are able to take care of your employees, supply challenges and your customers you are bound to make a good recovery. The faster we adopt the sooner shall our recovery be.


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