Analysing the Impact of Covid-19 on Automobile Sales in India Using ARIMA Modelling

Abstract

The Covid-19 pandemic has caused severe economic depression and has disrupted the supply chains of various industries. The automobile industry which contributes significantly to the Indian economy was gravely hit due to the lockdowns, semiconductor shortage and the uncertainty associated with the pandemic. This research paper analyses the effect of Covid-19 on the automobile sales in India using the time series modelling approach. The data recorded by SIAM from 2012 to 2019 was used to develop the Autoregressive Integrated Moving Average (ARIMA) model following the Box-Jenkins methodology. ARIMA model (2, 1, 3) was chosen as it had the lowest AIC and BIC criteria. This model was used to forecast the sales from 2020 to 2021 to give a picture of the expected automobile sales had the pandemic not occurred. The forecasted data from the model developed has then been compared with actual automobile sales data during the pandemic to gauge the level of impact Covid-19 had on the Indian automobile industry. The paper also explores the associated challenges that the automobile industry had to face due to the pandemic.