Millennials Prefer Ola, Uber: Sitharaman on Auto Sector Slowdown
A day after the Society of Indian Automobile Manufacturers (SIAM) reported that automobile sales in India have witnessed their worst-ever drop in August this year, Finance Minister Nirmala Sitharaman on Tuesday, 10 September, blamed the BS6 and mindsets of millennial for preferring Ola, Uber for the state of the industry.
She said that the automotive industry “had its good times two years ago” and that several external factors have led to its slowdown.
Union Minister Nitin Gadkari backed Sitharaman’s millennial statement and said it is one of the reasons affecting automobile sector.
“It's one of the reasons affecting automobile sector. Somewhere because of global economy, business cycle and because of demand and supply, there is a problem,” he said.
It was recorded as the steepest fall in overall vehicle sales in the country since SIAM started recording wholesale vehicle sales data in 1997-98. Some studies show that millennials do not want to commit to an equated monthly installment to buy a vehicle, and prefer Ola, Uber and metro services, she said.
The finance minister also said that she would not comment on what would be considered at the GST Council meeting on 20 September. The auto sector has demanded a GST rate cut and the GST Council has to decide on that, she said.
According to SIAM, all vehicle categories witnessed decline in sales during the month and the industry is hoping for change in fortunes after Finance Minister Nirmala Sitharaman’s attempts to ease their concerns.
PV Sales in India Dip for 10 Months Straight
SIAM said passenger car sales in August were also the worst ever. Last month, domestic car sales were down 41.09 percent at 1,15,957 units against 1,96,847 units in August 2018.
The fall in passenger vehicle sales in August was the tenth consecutive month of decline. In fact, all vehicle categories witnessed a decline in sales during the month. In the PV segment, market leader Maruti Suzuki India posted 36.14 percent decline in its August sales, at 93,173 units.
Hyundai Motor India Ltd (HMIL) also witnessed 16.58 percent decrease at 38,205 units, while Mahindra & Mahindra posted a fall of 31.58 percent at 13,504 units in during the month.
Ashok Leyland Crisis
After announcing five non-working days in its Ennore, Chennai plant, truck manufacturer Ashok Leyland on Monday, 9 September, announced a list of non-working days (total 60) across its plants in September.
In a regulatory filing, Ashok Leyland said that the non-working days at its various plants are due to continuous weak demand for its products.
Production Closes at Maruti Suzuki’s Manesar, Gurugram Plants
A sharp drop in sales led to a piling up of inventory, following which Maruti Suzuki reportedly decided to sync its production output with reduced demand – a demand so weak that the company had to close down production in its Manesar and Gurugram plants on 7 and 8 September.
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