After Auto Sector’s 2-Decade Low, Niti Aayog VC Assures Recovery
Automobile sales in India have witnessed their worst-ever drop in August this year, as despatches in all segments continue to plummet and the sector reels under an unprecedented down-turn, industry body SIAM reported on Monday, 9 September.
Niti Aayog Vice Chairman Rajiv Kumar, about the decline, said that a package announced in the sector by Finance Minister Nirmala Sitharaman should spur recovery.
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.
On 23 August, she listed out many measures to boost demand in the automobile sector in India. This included measures to increase liquidity in the hands of the consumer in the form of easier access to loans, as well as encouraging the purchase of new cars by government departments, among others.
Steepest Decline in Over Two Decades
This is the steepest fall in overall vehicle sales in the country since the Society of Indian Automobile Manufacturers (SIAM) started recording wholesale vehicle sales data in 1997-98.
As per the data released by the industry body, vehicle sales across categories, including passenger vehicles (PVs), two-wheelers, and commercial vehicles (CVs) stood at 18,21,490 units last month against 23,82,436 units in August 2018, a 23.55 percent fall.
India's domestic passenger vehicle sales declined 31.57 percent to 1,96,524 units from 2,87,198 units in the year-ago period.
In July, overall auto sales had witnessed its sharpest decline in nearly 19 years, dropping 18.71 percent to 18,25,148 units last month against 22,45,223 units in July 2018.
Previously, the worst decline in the segment was registered in July this year when wholesales had fallen 30.98 percent to 2,00,790 units.
PV Sales in India Dip for 10 Months Straight
The fall in PV 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.
Besides, total two-wheeler sales last month declined by a record 22.24 percent to 15,14,196 units compared to 19,47,304 units in the year-ago month.
Commercial vehicle sales were down 38.71 per cent to 51,897 units in August as compared with 84,668 units in August 2018.
These figures confirm what car makers in the country have been fearing for the past few quarters.
Leading manufacturers like Maruti Suzuki and commercial vehicle giant Ashok Leyland have been forced to shut down production – in order to avoid unsold inventory pile up – which has triggered job losses for workers.
With a prolonged slump in sales, automobile, and component, manufacturers have been seeking a GST cut on automobiles from 28 percent to 18 percent, to help the sector revive itself after a prolonged slump which has resulted in job losses.
The next GST Council meeting will be held on September 20, in Goa.
Union Minister Nitin Gadkari, on 5 September, assured the crisis-hit automobile industry of all possible support from the government, including taking up the demand of GST reduction with Finance Minister Nirmala Sitharaman.
“It is your (industry’s) demand that there should be reduction in tax of petrol and diesel vehicles. Your suggestions are good. I will take your message to the finance minister,” Gadkari said at the annual SIAM convention.
(Hi there! We will be continuing our news service on WhatsApp. Meanwhile, stay tuned to our Telegram channel here.)