India carmaker expects car sales to boom, as private space is seen as safer post-virus

New Delhi

THE coronavirus pandemic may turn out to be a blessing in disguise for India's auto industry, which had been hit by its worst slump in sales even before the outbreak.

R. C. Bhargava , chairman at Maruti Suzuki India, which sells every other car on the nation's roads, said there is possibility of a car boom after the lockdown is lifted, as social-distancing becomes a common practice.

"If buyers become apprehensive of sharing space with another passenger it will increase demand for vehicles," he said in a phone interview. "It's not the same India anymore. People's attitudes towards buying will change." The comments from the local unit of Suzuki Motor Corp came even as car sales in India, the world's fourth largest automobile market, slumped 52 per cent last month, and manufacturers (including the nation's biggest SUV maker Mahindra & Mahindra and Tata Motors, the owner of British luxury brand Jaguar Land Rover) were forced to stop production after Prime Minister Narendra Modi announced a nation-wide lockdown to stop the virus from spreading.

Mr Bhargava's comments are somewhat backed up by data from China, where dealerships are witnessing daily sales running at levels seen before the economic freeze. Customers appear more motivated than before the pandemic to buy a car because they see personal vehicles as safer than public transport.

As carmakers try to tide over the crisis by halting production and cutting investment, over 400,000 employees at dealerships risk losing their jobs, the Federation of Automobile Dealers Association wrote to the Prime Minister. Lost production is costing the industry 23 billion rupees (S$426.4 million) for each day factories remain closed.

Maruti Suzuki foresees that when it reopens, the number of employees allowed to work at a time will be smaller and that the carmaker will have to adjust production capacity accordingly, Mr Bhargava said. BLOOMBERG