G BALACHANDARChennai, June 1
Even as localised lockdownshave pulled down the demandfor vehicles, strong backlog oforders and buoyant export scen-ario are likely to give some cush-ion for passenger vehicle andtwo-wheeler makers in the ini-tial phase of post-lockdown tillthe pent-up demand kicks in.
Sales of cars, two-wheelersand commercial vehicles werehit during May due to thesecond wave of Covid-19 and theresultant localised lockdowns.As daily new cases start to de-cline in many States, there is ahope of lockdown being lifted,at least partially, in the comingweeks. Meanwhile, there hasalso been an uncertainty overthe demand scenario in thepost-lockdown phase this time.
While industry representat-ives hope pent-up demand will
kick in like last time, others be-lieve that this time demand re-covery may be delayed due tothe severe impact of the secondwave and higher number of in-fections in rural areas.
However, there will be somerespite in the short term afterthe lifting of lockdown. Whileseveral car makers have a strongbacklog of orders to executeamid constraints in productiondue to semi-conductor short-ages, the buoyant demand in ex-port markets may keep two-wheeler makers busy till the do-mestic demand revives.
“Most of the passengervehicle OEMs carry healthy or-der books,” says an analyst of
Emkay Global FinancialServices.
For example, Mahindra &Mahindra says the waitingperiod for its Thar stands atabout 10 months with totalbookings at more than 55,000units. XUV300 waiting periodstands at 12 weeks while that forScorpio and Bolero is placed at6-8 weeks. Similarly, most of theother PV makers also carry astrong order book, particularlyfor their new models.
So, when the governmentsannounce gradual lifting oflockdown, most of the PVmakers will start serving the ex-isting orders for some time.
Impact on demandIn the two-wheeler segment,second wave impact on de-mand is more severe as semi-urban and rural areas are grap-pling with a higher number ofCovid-19 infections unlike lasttime when these areas were rel-atively insulated from the virus.
But the good news for them is
the robust export sales at a timedomestic demand is expectedto take some time for recovery.Country’s top two-wheeler ex-porter Bajaj Auto managed tomaintain a decent level of ex-ports during May amid lock-down challenges. It exported1.80 lakh units compared toabout 2.22 lakh units in April,which was the second highestmonthly export number for thecompany.
TVS Motor Company, thesecond largest exporter of two-wheelers from India, clockedhigher export volumes in thelockdown-hit May than the pre-vious month. Its two-wheeler ex-ports stood at 102,332 units inMay (as compared to 94,801units in April ). Also, this is thesecond time this year , the com-pany clocked exports of morethan 1 lakh units. In March, it ex-ported 105,282 units.
“The demand in the interna-tional market continues to berobust,” says TVS Motor Com-pany.
Pent-up demandseen picking up
Order backlog, export market may keepPV, two-wheeler makers busy in near term
