Entry-level car buyers postponing purchases as COVID hit income sentiment: Crisil report

Customers aspiring to buy entry-level cars or those looking for an upgrade to such models are postponing decisions as the COVID-19 pandemic had hit their income sentiment significantly, rating agency Crisil said in a report on Monday. Last fiscal, premium segment cars sold five times faster than those with lower sticker prices, and notched up about 38% year-on-year growth compared with about 7% growth for the latter, Crisil said. Going forward, Crisil said, it expected the share of higher-priced cars to remain at the current level due to resilient incomes of affluent buyers and traction for new models. The report also said that estimates suggested the employee cost of large and medium-sized companies - a proxy for income sentiment among affluent buyers of higher-priced cars - has increased way more than those of small and medium-sized companies that account for a larger proportion of lower-priced car buyers. Bestselling models such as Hyundai Creta, Maruti Ertiga and Ciaz, Mahindra Bolero and Scorpio, Honda City, Ford Ecosport and Toyota Innova cumulatively accounted for 68% of the higher-priced cars sold in fiscal 2019, witnessing a decline in sales since fiscal FY19, Crisil said.