Mumbai: Slow economic growth coupled with boring consumer sentiment will be “extremely challenging” for the national auto industry, which was already reeling from a drop in sales even before the COVID-19 crisis, the vehicle maker said Kinetic Green electric.
At the same time, the company remains optimistic in the long-term electric vehicle (EV) segment and expects demand to be strong. However, it is looking to delay some of its investment plans for the next two quarters to assess demand.
Automakers reported zero sales in April amid the coronavirus blockade, while it dropped 89 percent in May. Although there was some recovery in June, sales were even lower year-over-year.
“The Indian auto sector was already struggling in the fiscal year prior to the COVID-19 crisis. It saw an overall decrease of almost 18 percent during 2019. This situation has worsened further due to the pandemic and the resulting blockade and its impact on the economy.
“Next year will be extremely challenging for the Indian auto sector due to slow economic growth and boring consumer sentiment,” said Sulajja Firodia Motwani, founder and CEO of Kinetic Green, in an interaction.
She said demand is returning, albeit slowly, after the close, and automakers in all segments have reported better performance in June compared to May.
“We expect the sector to recover in the fourth quarter of FY20-21. We hope that the festival season will bring joy to customers and manufacturers, as hopefully the COVID situation will also be under control not only in India, but across the country. world by then. “Motwani said.
Segments such as motorcycles, tractors and utility vehicles, which have a higher bias in rural sales, are expected to see a faster recovery, she said.
She added that urban centers face the brunt of protracted blockages, job losses and bad customer sentiment.
According to her, the demand for electric vehicles will be strong in the medium and long term amid factors such as health, pollution and the environment, along with lower operating costs.
In addition, demand for three-wheeled passengers is likely to be lower due to travel restrictions in urban centers and the non-operation of public transport such as Metro and trains, which generally require three-wheelers for last-mile connectivity.
“However, I expect a sharp increase in demand for three-wheeled charging, and especially for electric three-wheelers, due to increased demand in the e-commerce segment.
“We have introduced special three-wheeled electric vehicles for charging operations for these customers,” he added.
Continuing optimistic about the adoption of electric vehicles, he said: “In the short term, we hope that there will be an impact on our main business, which is shared mobility. So, to avoid this impact, we brought a new range of products that are complementing our electric vehicle business. ”
These offerings include a range of electronic foggers and electronic sprayers to disinfect outdoor areas and a portable UV disinfectant for indoor use.
“These new offerings add to our core business, but are more relevant in today’s social context. We are currently focusing on cost reduction, cash generation, and the range of newly introduced models.
“We will roll back some of our other investment plans for the next 1 to 2 quarters in order to monitor the state of economic recovery and demand, although there is no change in our core business strategy and there is no diversification away from electricity. Business of vehicles, “he said.
Kinetic Energy is focusing on the “survive, revive and prosper” strategy to generate and conserve cash, launch products that are exciting in today’s environment, and reduce costs, Motwani said.