COVID-19 | ICRA lowers growth outlook across automobile segments

Significant medical spends have eroded the purchasing power of individuals and families, ICRA Vice President says.

Ratings agency ICRA on Thursday downgraded the growth outlook for all automobile segments as the second wave of the pandemic, which has now penetrated the rural areas as well, has derailed the recovery momentum of the sector. “The second wave of the pandemic, the intensity of which has taken the entire country by surprise, is expected to impact near-term automobile purchases, across segments. Unlike the first wave, where infections were largely confined to urban clusters, the second wave has seen deeper and wider penetration, including into rural hinterlands,” Shamsher Dewan, Vice President & Group Head, ICRA Ratings, said. He added that the significant medical spends have also eroded the purchasing power of individuals and families to a greater extent, which would impact large ticket discretionary purchases like vehicles, at least over the near term.