Coronavirus impact: Rise in number of 1st-time buyers, additional purchase: MSI
New Delhi: The percentage of first-time buyers and additional car buying have increased in the midst of the COVID-19 pandemic as customers prefer personal mobility over public transport, according to a senior official of Maruti Suzuki India.
The company also believes that while vehicle sales have improved in July, the outlook for festive season will depend on how the health crisis pans out, and the long-term vehicle demand will also depend a lot on the fundamentals of the economy.
"First-time car buying is up and replacement buying is down, which means exchange is down. However, additional car buying is also up because of the functionality requirement," Maruti Suzuki India Ltd Executive Director (Sales and Marketing) Shashank Srivastava said.
Explaining reasons behind the development, he said, "That means people are preferring personal transport over public transport. At the same time their income levels are also probably going to be suppressed for sometime. Therefore, the trend is towards what we call 'telescoping of demand downwards', that is logical and intuitive. It is also reflecting in the data which we have so far."
The company had witnessed the share of first-time buyers going up by 5.5 per cent to around 51-53 per cent in the first quarter of this fiscal as compared to the fourth quarter of 2019-20.
MSI has also seen enquiry levels reach 85-90 per cent of pre-COVID levels with higher share in mini and compact segments at around 65 per cent against around 55 per cent earlier.
In July, sales of MSI's mini segment cars comprising Alto and S-Presso grew by 49.1 per cent at 17,258 units as against 11,577 units in the same month last year but that of compact segment consisting of models like WagonR, Swift, Celerio, Ignis, Baleno and Dzire was down 10.4 per cent at 51,529 units as against 57,512 units in the year-ago month. The company's overall domestic passenger vehicle sales in July grew by 1.3 per cent at 97,768 units as compared to 96,478 units in July 2019.