Auto sector shows signs of revival on back of entry-level cars

Auto sales showed signs of revival in the month of August mainly on the back of pent up demand, the festive season nearing, and customers concerned about safety preferring to drive their own cars and bikes rather than use public transport.  The auto sector which has been witnessing a significant slowdown in sales with a slackening of the economy for more than six months, now, with advent of the festive season has started to witness some signs of revival. Share prices of companies such as Maruti Suzuki Limited, Tata Motors and Mahindra & Mahindra surged with better than expected August performance.   The surge has been led by smaller cars and entry models as more people are looking at personal safety in the times of COVID-19, which has restricted public transport movement including shared car facilities provided by cab aggregators. Rural demand was also strong with farmers yielding good Kharif crops, resulting in increased tractor sales according to industry experts.  Domestic sales of Maruti Suzuki India grew 20% year-on-year in August 2020, while the overall sales grew by 17%. The company reported total sales of 124,624 units in August 2020, a growth of 15.3% over July 2020.    Maruti Suzuki India  August