According to a recent survey conducted by carandbike, the impact of economic slowdown on the vehicle budget is becoming evident. While demand for car above Rs. 9 lakh have dropped 14 per cent, enquirers for cars under Rs. 7 lakh have grown significantly.
The COVID-19 pandemic has hit the automotive market hard and there is no denying that. Auto production and sales across the nation have been suspended for over 50 days. But the industry is now getting back to its feet under the Lockdown 3.0 program. Few automakers have resumed partial operations. However, things are no longer the same. With social distancing becoming the new normal, automakers have rejigged their business strategies, and many have started selling cars online. Having said that, the impact of the pandemic on the economy will also affect the buying pattern of the consumer, and we have already started to see its effects. In fact, according to a recent survey conducted by carandbike, the impact of economic slowdown on the vehicle budget is becoming evident.
In the post lockdown era, there will be an increasing preference for personal mobility, and our survey showed that currently, the demand for higher budget cars, which are above ₹ 9 lakh, has dropped by 14 per cent. At the same time, enquires for cars under ₹ 3 lakh have picked up significantly, while demand for cars in the ₹ 5 lakh to ₹ 7 lakh bracket have risen by 5 per cent. The survey says that it’s the younger generation that is now looking for entry-level / budget cars, trying to find a balance between the need ensure safety and hygiene by opting for personal mobility, and their budget to buy a new car.
Also Read: Strong Pent-Up Demand For Vehicles Post COVID-19 Lockdown: carandbike Survey
While the overall demand for SUVs continues to remain high, enquiries for SUVs among first-time buyers have dropped during the lockdown period, and they are now looking at budget options like hatchbacks. There is also a 10 per cent growth in demand for pre-owned sedans. In fact, 4 out of 10 people have attributed a reduction in the budget as the main reason for them to change their choice of car. Most of them have reduced their budgets by 10 to 30 per cent. Out of the overall people who were part of the survey, 42 per cent said that they have reduced their budget, 32 per cent said reported no change in budget, while 26 per cent said they have increased their budget.
The survey also showed a change in financial planning, as 60 per cent of people said they will stick to taking a loan to buy a new car, while 15 per cent people who earlier planned to make a full cash payment, now plan to take a loan. 20 per cent people said they will stick to buying a car with full cash payment, while 5 per cent of respondents, who earlier planned to take a loan, now plan to make full payment.
The 2020 carandbike ‘Changing The Gears’ survey was conducted in April 2020 with a sample size of more than 1,000 customers along with more than 100 dealers of new and used cars. The survey was conducted in cities of Mumbai, Delhi, Chennai, Bengaluru, Pune, Kolkata, Hyderabad, Jaipur and Indore.