Even as localised lockdowns have pulled down the demand for vehicles, strong backlog of orders and buoyant export scenario are likely to give some cushion for passenger vehicle and two-wheeler makers in the initial phase of post-lockdown till the pent-up demand kicks in.

Sales of cars, two-wheelers and commercial vehicles were hit during May due to the second wave of Covid-19 and the resultant localised lockdowns. As daily new cases start to decline in many States, there is a hope of lockdown being lifted, at least partially, in the coming weeks. Meanwhile, there has also been an uncertainty over the demand scenario in the post-lockdown phase this time.

While industry representatives hope pent-up demand will kick in like last time, others believe that this time demand recovery may be delayed due to the severe impact of the second wave and higher number of infections in rural areas.

However, there will be some respite in the short term after the lifting of lockdown. While several car makers have a strong backlog of orders to execute amid constraints in production due to semi-conductor shortages, the buoyant demand in export markets may keep two-wheeler makers busy till the domestic demand revives.

“Most of the passenger vehicle OEMs carry healthy order books,” says an analyst of Emkay Global Financial Services.

For example, Mahindra & Mahindra says the waiting period for its Thar stands at about 10 months with total bookings at more than 55,000 units. XUV300 waiting period stands at 12 weeks while that for Scorpio and Bolero is placed at 6-8 weeks. Similarly, most of the other PV makers also carry a strong order book, particularly for their new models.

So, when the governments announce gradual lifting of lockdown, most of the PV makers will start serving the existing orders for some time.

Impact on demand

In the two-wheeler segment, second wave impact on demand is more severe as semi-urban and rural areas are grappling with a higher number of Covid-19 infections unlike last time when these areas were relatively insulated from the virus.

But the good news for them is the robust export sales at a time domestic demand is expected to take some time for recovery. Country’s top two-wheeler exporter Bajaj Auto managed to maintain a decent level of exports during May amid lockdown challenges. It exported 1.80 lakh units compared to about 2.22 lakh units in April, which was the second highest monthly export number for the company.

TVS Motor Company, the second largest exporter of two-wheelers from India, clocked higher export volumes in the lockdown-hit May than the previous month. Its two-wheeler exports stood at 102,332 units in May (as compared to 94,801 units in April ). Also, this is the second time this year , the company clocked exports of more than 1 lakh units. In March, it exported 105,282 units.

“The demand in the international market continues to be robust,” says TVS Motor Company.

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