The auto industry sales have plummeted to an all-time low. The passenger car segment has witnessed a decline of 30 per cent in year-on-year sales. SIAM has also chipped in with the information that sales of even two-wheelers, as well as commercial vehicles, are at an all-time low. This means that the remedial measures undertaken by the finance minister, a couple of weeks ago, haven't had any effect. The stimulus package given by the GoI didn't have any significant effect. SIAM president, Rajan Wadhera said that while the industry, in general, has been doling out discounts, the scope is limited. The government should consider reducing GST rates from 28 per cent to 18 per cent which will significantly reduce the cost of vehicles and, in turn, create demand. He also said that an integrated scrapping-based incentive should be given to the vehicles and should encompass all segments.
Wadhera further emphasised that the festive season is just around the corner and the government should take immediate additional measures. This will ensure that the "industry could hope for a better festival season that could harbinger a recovery."
To assess the damage the industry is reeling under, we have taken the sales number done by Mahindra and Mahindra. Wadhera is the president of the automotive section there. The passenger vehicle shrunk by 32 per cent. In August 2019, the total number of vehicles sold by Mahindra were 36,085 as compared to 48,324 in 2018. This includes exports too.
A total of 11,544 units were sold by Toyota and this includes exports as well. Compared to this 14,581 Toyotas found new homes in August 2018. This shows a decline of 21 per cent overall. Toyota Kirloskar Motor deputy managing director, N Raja, said, "We are happy that despite the current slowdown in the industry which has resulted in slump in domestic sales, Glanza sales have shown a positive momentum. We have been successful in reaching out to our target buyers ‘First Time Toyota Buyers’, we have seen higher footfalls from them."
The country's biggest carmaker, Maruti Suzuki, sold 1,064,13 units including exports. In contrast, last year Maruti sold 1,581,89 units. This is a negative trend of 32.7 per cent. The only car makers who have reported some amount of growth or brought about a sense of cheer are the newcomers - Kia and MG Motors. Kia reportedly sold 6,200 units of the Seltos while MG managed to move 2,018 cars.
Will the automotive industry revive in the coming days? Let us know your thoughts.