You are here: Home » Companies » News
Business Standard

Auto sales could hit speedbreaker with spike in rural Covid-19 cases

Rural India accounted for 18% of new infections in June, and as much as 40% in Sept; The spike appears to have an inverse relationship with rural sales, says a Crisil note

Auto sales | Crisil

Sachin P Mampatta  |  Mumbai 

automobile, auto sales, car, equipment, manufacturing, component, production, jobs, workers
Rising new cases have coincided with a fall in the rural market share across segments. Representational photo shows a car being assembled by workers

Vehicles sales' rural market share has declined even as fresh Covid-19 cases have begun to show up more outside city areas than before, according to a research note from rating agency released on Friday.

Rural India accounted for around 18 per cent of the new Covid-19 cases in June. This has since risen to around 40 per cent (see chart 1) in September. The quarterly vehicle sales numbers for rural areas seem to show an inverse correlation with the share in new cases. Rising new cases have coincided with a fall in the rural market share across segments, according to the note.

Passenger vehicles’ rural share dropped from 36 to 34 per cent between the June and September quarters. Rural India accounted for over half (51 per cent) of the total two-wheeler sales in June. This fell to 46 per cent in September. The share of commercial vehicle sales also fell from 44 per cent to 43 per cent (see chart 2).

Urban centres have also begun to show increased economic activity as the country eased restrictions amid falling cases. Analysts believe more people are stepping out to purchase their own vehicles in cities too, leading to a recovery in urban market share.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, November 06 2020. 17:36 IST