New Delhi: Car sales in India suffered their biggest monthly drop on record, as the slump in the country’s auto sector shows no sign of letting up.
Deliveries slid 41% in August from a year earlier to 115,957 units, while sales of passenger vehicles including SUVs fell 32%, according to data released by the Society of Indian Automobile Manufacturers on Monday. Truck and bus sales dropped 39%, and two-wheeler sales — a key indicator of demand in rural India — fell 22% to 1.5 million units.
The automobile sector is a key part of Asia’s third-largest economy, employing millions of people directly or indirectly and contributing more than 7% to the nation’s gross domestic product, according to McKinsey & Co. Slowing income growth for farmers in rural India has contributed to a fall in sales.
Companies from Suzuki Motor Corp.’s local unit to Mahindra & Mahindra Ltd. have cut production and laid off workers to cope with the slowdown. Prime Minister Narendra Modi’s administration has lifted a ban on new vehicle purchases by state-run departments and offered other concessions. Transport Minister Nitin Gadkari last week said he’ll convey a demand for a lower levy on petrol and diesel vehicles to the finance minister. – Bloomberg
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The reality is that car sales will no longer boom, with the rise of sharing apps and the availability of metro transport. The car industry must quickly adjust to the new normal.
Perhaps aiming to regain last years’ sales volumes would be a good target, but forget about year to year rise in sales figures.That will curb the spreading job losses also to a manageable level.
On one side we want less cars on Indian roads due to air pollution they cause. On the other side some people are worried about drop in car sales. What a paradox. If we can allow cars to pollute the air, why should people be denied taking drugs as both have the similar purposes. I am with those who have postponed purchase of cars.
Father used to watch CNBC 18 the whole day, Udayan Mukherjee being his favourite. Wife has seceded completely from the news channels, cannot handle what is happening to her portfolio. My only regret is why we have waited so long to accept reality, do something constructive about it. Even today, India Inc cannot summon the courage to speak up.