Auto industry drives into 2021 with hopes of recovery

The Indian automobile industry was eagerly waiting to usher in 2021 as the year gone by was the worst ever in the history of the Indian auto sector owing to the Covid-19 pandemic and zero production in April due to the lockdown. There was a recovery of sorts later in the year and there is hope of sunny days in 2021.

Companies have already announced newer versions of their cars and the last quarter promises to see quite a bit of action. For instance, Audi has said that the A4 would be launched in January. Toyota has announced that the new Fortuner will be launched, while the Tata Altroz is also expected to be launched very soon. French carmaker Citroen is on course to open a showroom in New Delhi soon.

There is a very good likelihood of a busy January with more good news, not only for the car industry but also when it comes to two-wheelers.

There were also unconfirmed reports that Maruti Suzuki India would bring back some diesel models. If this turns out to be the case, diesel car enthusiasts are very likely to make purchases.

There is a bit of good news on the Covid-19 vaccine front, but fear may still remain in the minds of people about using public transport. Hence, sales of two-wheelers and cars are very likely to gather steam. All these factors bode well for the sector and hopefully, production and sales will boom further in 2021.

There has been talking of introducing a scrappage policy for older vehicles and incentives to those who scrap their internal combustion engine (ICE) vehicles. Delhi had made some announcements in mid-2020, just after the lockdown ended. Once the Union Government announces a scrappage policy, it is bound to have a positive impact on the environment if very old vehicles will be off the roads. Plus, if incentives are given for those who scrap ICE vehicles and opt for electric vehicles (EV), it would push sales of the latter. It all depends on what the final policy will be and the auto industry is hoping there will be some good news on this front in 2021.

What the country would also like to see is better adoption of EVs in 2021. There are several reasons as to why India is not taking to EVs, at least as much as we would have liked. One of the major reasons is the high purchasing cost. Secondly, it is range anxiety for some potential customers. The general feeling is that India is not ready for EVs.

However, there is a lot of work going on when it comes to charging infrastructure as even start-ups are investing in charging stations and battery swap points. The year 2021 is likely to see more good news on the electric front. However, one thing is clear and it is that mass adoption of EVs is quite some time away as far as India is concerned.

One positive bit in 2020 was that India saw a bitter battle in the compact sports utility vehicle (SUV) segment. There is a wide range to choose from as the Indian looks to use personal transport. Other segments grew too, but the buzz was in the sub-four metre SUV segment. New technologies like the manual transmission without a clutch pedal made it an incentive for a buyer to drive without fatigue on crowded big city roads. Going by the trend in 2020 and with the industry hoping to have a better 2021, more such technologies and connected features are likely to make their way into automobiles.

There are several factors that will shape the course that the Indian automobile industry will take in 2021. Hopefully, the mayhem of 2020 will be set right this year.