COVID-19 and lockdown brought unemployment, pay cuts and bankruptcy. The outlook for the economy was grim and in particular, the automobile industry was severely impacted by cutting million jobs and no manufacturing.
In April this year, due to the lock-down, the Indian auto industry sold a total of zero cars, but the rebound was a surprise. Most manufacturers of passenger vehicles have seen faster-than-expected growth. For September, passenger vehicle sales increased by 26 per cent year-on-year, with a total of 2,72,027 units dispatched.
Of course, progress in September 2020 came on a low 2019 base; the year 2019 saw the lowest industry revenue in 20 years with a declining economy and growing car prices. Even, this year’s progress month-on-month has been optimistic and the overall recovery is promising.
But this column isn’t about a rebound of revenue. No in truth, it’s about what’s going on inside those numbers. The Alto outsold the Swift in the previous few months, but then sales rose for the Swift and outsold its more economical and ever-popular sibling in September 2020.
That is pretty substantial. People are forced to scale down on expenses. Perhaps then, the Swift benefited from people falling out of the Baleno, but sales of the Baleno remained untouched and in fact, even increased. Also, the sales of lower models of the Swift saw an increase, according to people at Maruti, who were just as shocked by this; usually, it’s the higher models that sell more. So if anything, this may mean that consumers are stretching for the Swift.
And it’s not just Maruti; a preference for higher-spec or higher-segment models has been noticed by others too. For the first time since they set up operations in India, Hyundai delivered more SUVs than cars this year. It’s a big boost to join the hot compact SUV space, of course, but SUVs that outsell a car line-up that includes some nice and famous budget hatchbacks are not a mean feat.
Yeah, there is now a greater need for personal mobility than ever, but what is motivating the selling of higher-end options? Why do sales of vehicles tend more towards emotional space? Revenge Buying! You might have heard the term. Buyers are striking out with a vengeance, indulging in shopping therapy to drive out the COVID blues, with minimal opportunities for fun, such as vacations or even dining out. This is seen all over the world, and India is no different.
There is no question that revenge buying is what is also behind the selling of higher-end vehicles. Unfortunately, many people lost their jobs and have had to deal with pay increases, but it seems that the car-buying population has made more use of the European holiday budget. Yes, that’s one time we can say revenge is sweet indeed.