A quarter drop in PV sales in FY21
Research body ICRA expects domestic passenger vehicle demand to decline by almost a quarter in the current fiscal as against earlier projections of a 10-12% drop. This is because numerous lockdown extensions are having a direct impact on the economic environment and consumer sentiments.
“Each lockdown extension by 15 days has taken a toll on full-year industry demand by 3-5 per cent. Given the adverse overall conditions, ICRA continues to have ‘Negative’ outlook on the PV industry since Q2 FY2020,” ICRA said. Further, factors like liquidity crunch and tighter financing environment, weak rural income and overall slowdown in economic activity have also dampened the sector’s performance.
The ratings agency maintains that it continues to have ‘negative’ outlook on the passenger vehicle (PV) industry since the second quarter of the previous fiscal FY2020. On the brighter side, though this can turn to stable from negative if demand environment improves on a consistent basis over the next 12-18 months.