The coronavirus outbreak is likely to negatively impact half of the passenger vehicle (PV) sales in FY21, a report said. The auto sales may remain muted even after the lockdown ends on May 3, a report by CRISIL said. The start of normal operations at automobile dealerships would depend on whether a dealership is outside a demarcated hotspot and if it has the necessary licences from the state or district administration to operate, the report added. The vehicle manufacturers had to shut factories and showrooms for several days to comply with government directives during the nationwide lockdown to fight against coronavirus pandemic.

"Our analysis of automobile retail sales pattern and spread of Covid-19 across districts in India shows that the level of risk for two-wheeler and passenger vehicles segments is considerably different in 'very high impact' districts, or districts where both automobile sales intensity and Covid-19 infection are significantly high. These districts account for 50% of passenger vehicles sales in the country. In case normal business activity does not resume in these districts after the first week of May, half of passenger vehicles sales will be at 'very high risk'," the report says.

According to an analysis, top 100 districts account for 62 per cent of passenger vehicle sales in volume terms, with 41 per cent coming from the top 40 districts alone. In comparison, top 100 districts account for only 45 per cent two-wheeler sales and top 40 for 26 per cent, the report also said.

"Players in the industry will have to devise a strategy after carefully considering their product portfolios, sales distribution by district and dealership presence - all of which are key to pushing volumes in this scenario. Prioritisation of districts on the basis of opportunities and risks will be the new matrix to work on," Hemal N Thakkar, associate director, Crisil Research, said.