OdishaPlus Bureau

India’s auto industry is going through a very bad phase at present. Due to the poor sale of passenger vehicles, the industry is constantly hitting new lows. The situation is so precarious that the country’s largest auto maker Maruti Suzuki has brought down its production by about 39 percent in the last three months. According to auto industry experts, if such conditions remain it will have a severe impact on profits.

Maruti Suzuki


Now for numbers. Passenger vehicle sales in the country have declined 17 percent in April. This is the biggest fall since October 2011. Sales in October 2011 were down by 19.87 percent. According to data released by the Society of Indian Automobile Manufacturers (SIAM), the sales of passenger vehicles in domestic market fell 17.07 percent in April, 2019 to 2,47,541 units. This means that in April this year only about two lakh 47 thousand passenger vehicles have been sold. In April last year, 2, 98,504 passenger vehicles were sold.

Considering the figures for the last three months, domestic passenger vehicle sales too were down 17 percent and car sales plummeted about 20 percent. In March 2019, passenger vehicle sales were down by almost 3 percent and car sales fell 6.87 percent. Similarly, in February the decrease was 1% and 4.33% respectively. Along with the sale of cars in the country, the sales of two-wheeler have also been on the downslide.

passenger Vehicle

According to available statistics, sales of vehicles in all major categories including two wheelers and commercial vehicles declined in April. In April, 2019, sales of vehicles in different categories dropped 15.93 percent to more than 20 million. In April 2018, the figure was 23 lakh. Auto industry experts feel that in the last 10 years, the industry did not experience such a sharp   decline in sales across all categories.

According to auto industry experts, if such conditions remain it will have a severe impact on profits.

Sale of Maruti Suzuki India, country’s largest auto maker, fell by 19.61 per cent to 1, 31,385 units in April. Hyundai Motor India sales fell 10.12 percent to 42,005 units. Mahindra & Mahindra’s passenger vehicle sales too declined by 8.52 percent. In the  two-wheeler segment , the sale of Hero Moto Corp fell 12.10 percent to close to 5 lakh 34 thousand. Similarly, Honda Motorcycle and Scooter India’s motorcycle sales fell 25.77 percent to 1,57,569 units.


Twin Reasons

According to SIAM Director General Vishnu Mathur,sale of vehicles has been affected due to negative factors  in the economy such as cash crisis and rising costs of insurance. At the same time, the overall sentiment too has weakened due to the ongoing elections. Mathur is of the opinion that with the stock during the festival season still languishing in the showrooms, companies have put a brake on production. Also, the beginning of the financial year is the time for inventory correction. So, automobile companies are removing old stock. The second reason for production cut is that in the near future, companies foresee some models being phased out due to new safety and BS 6 norms.

According to Mathur, if the situation continues for some more time, it can have an impact on jobs. Of Course, there are no reports of job cuts in the industry right now. But if the slowdown continues, then there may be a threat to jobs. Now that elections are almost over and a new government is to take over soon, things will improve along with stability in the sector.