Auto sales go into a tailspin as industry battles headwinds
Domestic sales drop 8.6 per cent in May
Auto companies seem to be losing pace and direction with sales figures for May released by the Society of Indian Automobile Manufacturers (SIAM) on Tuesday driving home the message that the slowdown is here to stay.
According to data from SIAM, total domestic sales declined by 8.62 per cent in May 2019 compared with the same month the previous year.
The slump was recorded across almost all automobile types, with passenger car sales declining by a significant 26.03 per cent. In May 2019, 1,47,546 passenger cars were sold. The total passenger vehicle sales, including vans and utility vehicles, declined by 20.55 per cent, with a total of 2,39,347 units sold.
Even two-wheeler sales fell, as the world’s largest two-wheeler market faced headwinds in the form of increased insurance rates and uncertainty ahead of the BS-VI regulations that will kick-in next year.
Total two-wheelers sales declined by 6.73 per cent compared to May last year, as scooter sales fell by 7.87 per cent and motorcycle sales declined by 4.89 per cent.
A major cause for concern
SIAM termed this continuous decline unprecedented. “We had anticipated that before the Budget, the industry will not be able to turn around. But if you look at the severity of the drop, that is something which is bothering us,” Sugato Sen, Deputy Director General, SIAM, told BusinessLine.
Sen further added that apart from one month when sales picked up, the past 11 months, have witnessed a continuous decline.
While analysts and industry experts have attributed a variety of reasons for the slump, including the General Elections, they are of the opinion that these factors need to be studied in a detailed manner.
“We used to look forward to elections for sale of utility vehicles and two-wheelers. This time, all categories of vehicles are down,” Sen elaborated. Other industry experts said that a possible reason behind reduced automobile sales could be improving public transport facilities, such as better metro connectivity in some cities.
Details Total passenger vehicle sales, including vans and utility vehicles, declined by 20.5 per cent in May