Reimagining the new normal in India’s transport industry
Disruptions force people to make significant changes to transport patterns. Whether it’s embracing two-wheelers or eyeing more sustainable forms of transport, that’s one reason why India continues to record a healthy growth in vehicle sales even during the pandemic.
A deadly combination of government lockdowns, fears of contracting the coronavirus and the rapidly rising need for personal mobility have joined forces since the onset of the coronavirus pandemic to radically alter the outlook of the global transport and transit industry – and India is no exception.
The coronavirus crisis has affected all forms of transport, from cars, and public transport in cities, to buses, trains and planes nationally and internationally. “Global road transport activity was almost 50% below the 2019 average by the end of March 2020 and commercial flight activity almost 75% below 2019 by mid-April 2020,” said the International Energy Agency (IEA) in its bi-annual energy forecast report. “Public transport has also been affected. For example, the strict lockdown imposed in the UK in March 2020 has led to a 95% decrease in underground journeys in London. This is supported by data from transport planning smartphone apps showing that trips are down by over 90% since the crisis began in many of the world’s major cities,” the IEA said.
Wholesale volumes keep growing
The severe restrictions put in place to limit the spread of Covid-19 thus not only have had a direct impact on people’s lives, but also more indirect but long-term consequences. In India, a combination of changing social/financial circumstances and extended lockdowns have not only led to a fall in demand for passenger transport by more than 90%, but has also contributed to the reimagining of the personal vehicle sector.
For instance, the growing need for a personal and sanitized space even in mobility has coupled with strong rural demand to boost the 2-wheeler industry in India, according to latest sales figures.
“Most of the major two-wheeler manufacturers in India witnessed healthy wholesale volumes in July 2020. The top five OEMs Hero MotoCorp, Honda Two-wheelers, TVS Motors, Bajaj Auto and Royal Enfield cumulatively accounted for a wholesale volume of 1.2 million units in July 2020, even though the sales volume is still 13% lower compared to July 2019,” said Animesh Kumar, Director of Automotive Consulting at GlobalData.
“There are several drivers for the growth in sales. A positive trend has been noticed towards the preference for personal mobility and it is only going to grow at least in the short-term,” he said.
One key reason behind the surge in two-wheeler sales is also the impact of Covied-19 on consumer preferences. “Concerns regarding the safety and hygiene are driving some customers away from public transportation. As a result, customers are opting for personal mobility and the sales of both new and used two-wheelers are growing. Affordability is a key factor among a large share of users of public transportation and the sales of two-wheelers are expected to witness faster growth in the coming months,” Kumar said.
How the mass transport industry can survive
“Another factor that is a major growth driver for two-wheeler sales is the strong demand from the rural and semi-urban areas owing to good monsoons and harvest season. A higher disposable income has increased in rural areas and the inadequate public transport infrastructure is driving customers towards two-wheelers. Unlocking of economic activities, easing of restrictions on movement, uncertainties over availability of public transportation and pent-up demand from May and June also helped in improving sales volumes in July 2020. There have been reports that two-wheeler dealers are receiving high number of bookings, which indicates that the growth is not temporary and is likely to sustain,” Kumar said.
While the changes in demand and sales in the transport industry are primarily driven by lockdowns, even when such restrictions are over, challenges will persist to contain COVID-19, keep cities moving and ensuring the financial survival of the mass transport industry.
“Enhancing the safety of passenger transport will be the most pressing issue. Across the world, operators have begun readying for this time by developing protocols and procuring protective equipment to maintain higher hygiene standards and protect staff and passengers. India can help restore users’ trust in public transport by creating a COVID-19 Green Label, which shows that operators have met standards and are ready to restart operations,” according to Gerald Olivier and Nupur Gupta in a study published by the World Bank.
While India’s vehicles and transport industry has demonstrated enough resilience to survive previous crises and emergencies, in recent decades, there have been a number of situation such as health and terrorism-related incidents that have caused sudden changes in transport demand. Those situations have forced people to make significant changes to transport patterns, either in response to changes necessitated by transport disruptions, or perceived risks of travelling. “This is particularly true for non-essential travel and in relatively wealthy countries where people have access to remote working facilities or alternative, private forms of transport. For other people, the decision to cease commuting during a crisis may not be an option at all,” said the IEA.
Time to transform transport strategy
Turning the crisis on its head, analysts argue, this is a great time for India to set about transforming its transport strategy with an eye on environmental damage and a growing population in major cities.
“The recovery period from the pandemic is an opportunity to shape new forms of mobility that provide good access for all, clean air, reduced congestion, and reduced crash fatalities. Mexico City, Bogota, Oakland, Lima, Berlin, London, Wuhan, Milan, Paris and New Zealand offer many examples of how urban mobility is being rethought with the rapid rollout of walking and cycling infrastructure at low costs while creating space for other sustainable options over a longer time horizon,” the World Bank said.
As in the rest of the world, the post-recovery period in India too is likely to see a rise in home-based offices, digital schooling, commuting to work by walking or cycling – specially because of India’s high-density urban agglomerations and its vast numbers of low- and middle-income urban families. Whether it’s choosing environment-friendly electric cars or more affordable two-wheelers, this is a good time for Indians to build upon the lessons of the pandemic and rethink the new normal.