Indian Automobile industry hits all time low because of global slowdown
According to data released by Society of Indian Automobile Manufacturers (SIAM), the sales of passenger vehicles fell for 9th consecutive month, registering a fall of 31% in July 2019. This is the biggest one-month plunge India has witness in the last 19 years.
The vehicle sales across categories, including Passenger Vehicles (PVs) and two-wheelers, stood at 18,25,148 units in July 2019 as compared to 22,45,223 units in July 2018. The new safety and emission regulations have made the manufacturers rise the price of the vehicles. Moreover, the economic slump, and cautious measures adopted by India’s consumer finance providers while providing auto loan to consumers, have resulted in lowering of sales.
Due to slowdown in the auto sector, more than 2.3 lakh people have lost their job. Besides, more than 300 dealerships across India have been closed.
Speaking on the occasion, the Director General of SIAM – Vishnu Mathur said, “This is a very deep sort of a slump that is impacting every segment of the industry. Passenger car sales are down this time by almost 36 percent and passenger vehicles overall is down by almost 31 percent.”
The industry bodies are calling upon the Government to help bail out the sector by offering them tax cuts and other steps to get the industry on track. Mathur further added, “The data shows how urgent the need is for revival package from the government. There is urgent need for some kind do action. The industry is doing all it can to promote sales. I think this is the time when the industry really needs the support of government coming out with a revival package.”
As per the figures shared by SIAM, Maruti Suzuki recorded a loss of 36.7% in sales in July 2019. Tata Motors, which owns Britain’s biggest carmaker Jaguar Land Rover, reported 31% drop in sales. Mahindra & Mahindra registered a loss of 17%. South Korea’s Hyundai and Japan’s Toyota witness a fall of 10% and 24% respectively in July 2019. The drop in the sales came despite the recent launch of Mahindra and Mahindra Ltd.’s ‘XUV300, Hyundai Motor India Ltd.’s Venue and MG Motor India Ltd.’s Hector models.
Reacting on the market slump, the Senior Executive Director (Sales & Marketing) at Maruti Suzuki – R.S. Kalsi said, “There is no point pushing stocks in the dealerships when there is no demand in the market. We will take a call regarding production after taking a look at the market situation. We have an inventory of a little over a month with our dealers since retail sales are under pressure.”
Talking about commercial vehicles, the increase in freight charges hit the sales. The sale of medium and heavy commercial vehicles witnessed a drop of 37% in July to 17,722 units. Light commercial vehicles posted a 19% decline to 39,144 units. The total sales of commercial vehicles fell by 26% to 56,866 units.
In the two-wheeler market, total sales fell by 17% in July to 1.51 million units. While the sales of motorcycles fell by 19% to 933,996 units, the bottom line for scooters fell 12% to 526,504 units.
Prior to this, India was the favourite destination for MNC carmakers, with annual sales of passenger vehicles rising by about 33% over the past 5 years. Before this slump, India was well poised to overtake Germany and Japan and emerge as world’s 3rd largest car market by 2020, after China and United States (U.S.).
