Car pooling may take a back seat post coronavirus attack

Mumbai | New Delhi: Shared mobility is likely to take a short-term hit and demand for entry-level cars and two-wheelers may increase post the Covid-19 crisis, according to two top automobile industry veterans. Hero MotoCorp chairman Pawan Munjal and Mahindra & Mahindra managing director Pawan Goenka expect people to continue observing social distancing norms even after the crisis is over, and that is likely to bring a change in the way they commute.

While daily commuters may prefer avoiding public transport, the possibility of job or salary cuts would weigh on their capacity to buy a personal vehicle. In this situation, a mass-market motorcycle or scooter could become the preferred mode of transportation for many, while car buyers could settle for small cars to reduce the pressure on their wallets.

In a recent analyst call, Munjal said travelling habits were expected to change as people would continue to prefer social distancing for some more time now. Hence, the preference to opt for own vehicles would emerge. Hero’s rival, Honda Motorcycle & Scooter India, believes this could bring in a spurt in the used two-wheeler business, which still remains quite unorganised. These circumstances may trigger demand for pre-owned cars and SUVs as well. Another view, according to Mahindra’s Goenka, is that work from home and virtual meetings might result in people driving fewer kilometres on an average. Perhaps shared mobility will become less desirable after the pandemic, giving an impetus to personal vehicle buying, Goenka said at a recent virtual ETAUTO townhall meeting. However, he expects this to be a “temporary phase” and shared mobility to eventually return to the fore.

“People will be concerned about using a vehicle as they don’t know who was in it before. If it’s a shared taxi, who is sitting next to them, they don’t know,” he said.

Historically, demand for entry-level vehicles has increased after economic slowdowns, as people had less money for discretionary purchases. Sales of entry vehicles have faced the biggest hit in recent times, due to a 10-15% spike in prices following the introduction of new emission and safety standards.

“We expect three things to happen post the lockdown is lifted. The conversion from enquiry to sale may take longer; people will end up downgrading their budget; and thirdly buyers will tend to choose trusted brands,” said a senior executive at a leading carmaker, who didn’t want to be named.

According a survey conducted by Carwale.com this week, just over half the 10,000-plus respondents said they would not be going ahead with their plan to buy a car now.