Auto sales may slip to 10-yr low amid weak sentiment

Mumbai: Automobile sales will touch decadal lows in FY21as job losses and salary cuts in urban areas sour consumer sentiment, according to Crisil research. Passenger and commercial vehicle sales are expected to fall down to 2010 levels.

Up to 80% of cars are bought through financing and consumers would be hesitant to take a loan in these circumstances. Also, two-third of passenger vehicles sales are from people who are replacing their car, an “unnecessary expense” that could be deferred.

Passenger vehicles sales are predicted to dip 25% on the low base of FY20 when sales declined 18%. Commercial vehicles sales were predicted to decline 27%. Demand is predicted to sharply rebound in FY22, with a double-digit growth, albeit on the extremely low base.


The fall in demand for automobiles in the short term could be cushioned by vehicle purchase from people being hesitant to use public transport. This will benefit the two-wheeler and used vehicle segments, said Hetal Gandhi, director, Crisil Research.