Rural auto sales have lost resilience of last year. Normal monsoon, MSP hike can bring it back.
Synopsis
The second wave of the pandemic has affected rural markets much more than the first. Rural markets’ pre-Covid-19 retail contribution to total auto sales was around 60%, which has come down to around 50% in July 2021. Companies are hopeful things will look up August onwards. But there are factors beyond their control that will decide the course.
They had managed to hunker down amid the doomy march of the first wave. When auto companies were gasping for breath last year, the rural markets led the recovery. Every auto company, from Maruti Suzuki to Hyundai to Hero, would swear by the anchor role played by rural sales since the middle of 2020. But this time around, the hammer has fallen on India’s smaller towns and hinterland. And the impact is showing up.“Rural markets were affected a bit
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