Auto sales could hit speedbreaker with spike in rural Covid-19 cases

Rural India accounted for 18% of new infections in June, and as much as 40% in Sept; The spike appears to have an inverse relationship with rural sales, says a Crisil note

Vehicles sales' rural market share has declined even as fresh Covid-19 cases have begun to show up more outside city areas than before, according to a research note from rating agency Crisil released on Friday.  

Rural India accounted for around 18 per cent of the new Covid-19 cases in June. This has since risen to around 40 per cent (see chart 1) in September.  The quarterly vehicle sales numbers for rural areas seem to show an inverse correlation with the share in new cases. Rising new cases have coincided with a fall in the rural market share across segments, according