Passenger Vehicle Sales Plunge 31%, Steepest Fall In Nearly 2 Decades

Cornelia Mascio
Agosto 14, 2019

SIAM said passenger auto sales in July were also worst since December 2000 when the segment had declined by 39.86 per cent.

"These numbers are an urgent call for the government to roll out a stimulus package without further delay", said Vishnu Mathur, director general, Society of Indian Automobile Manufacturers.

The slowdown in the industry is largely on account of a bad festive season a year ago which led to the problem of higher inventories, tight liquidity with banks as a fallout of the NBFC crisis and an overall sluggish economy and low consumer sentiment.

Additionally, the data showed that passenger cars sales in the domestic market plunged by 35.95 per cent to 122,956 units, from 191,979 units sold during July 2018.

In addition, overall sales of two-wheelers, which include scooters, motorcycles and mopeds, edged lower by 16.82 per cent to 1,511,692 units.

The commercial vehicles segment registered a de-growth of 25.71% in July as compared to the same period past year, the organisation said.

Furthermore, among the other sub-segments of passenger vehicles, the number of utility vehicles sold in India went down by 15.22 per cent to 67,030 units in July 2019, while 10,804 vans were sold last month, down 45.68 per cent from the corresponding month of 2018. "The industry is doing everything possible to increase sales but it needs government support to prevent the crisis from worsening". "Manufacturing, jobs and revenue to the government", Vishnu Mathur, director general, SIAM, told reporters on Tuesday, adding that auto and motorcycle manufacturers have already slashed about 15,000 jobs.

Underlining the current grave situation of the auto industry, he said that in the previous downturns the sector witnessed in 2008-09 and 2013-14, at least some of the segments of the industry were growing. "We are now hoping that the government will come out with some revival package very soon", he added.

At present, the sector has proposed a reduction in GST rates, a scrappage policy and resolution of the liquidity and the non-banking finance company (NBFC) crisis. The auto industry employs over 35 million people directly and indirectly. "The more the industry goes down, more hard it would become for it to come up", Mathur said. Even India's largest carmaker- Maruti Suzuki had to lay off about 6 per cent of its workforce while Nissan India recently let go 1,710 employees in India. July 2019's sales decline of 18.71 percent is also the highest. Year-to-date (April-July) sales also saw a downtick of 21 per cent.

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