Auto sales go into a tail­spin as in­dus­try bat­tles head­winds

Do­mes­tic sales drop 8.6 per cent in May

The Hindu Business Line - - FRONT PAGE - MIRZA MO­HAMMED ALI KHAN

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

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