For the first quarter of the ongoing financial year, Maruti Suzuki, India’s leading car manufacturer, reported a decline of 17.9% in sales in comparison to the same period last year. The company reported a total sales of 402,594 vehicles during the first quarter i.e. in the months of April to June 2019. During this period, Maruti Suzuki’s domestic sales stood at 374,481 units which are lower by 19.3% in comparison to the previous year. While the exports stood at 28,113 units. During this quarter, the net sales of the company stood at Rs 187,352 million which again, is lower by 14.1% in comparison to the same period last year. Net profit for the company during this period stood at Rs 14,355 million which is down by 27.3%.
The decline in sales is not exclusive to Maruti Suzuki. Automobile manufacturers in India, across segments, are currently observing a substantial decline in sales. The reason for the same can be attributed to the current market sentiment. The demand is low as there is rising uncertainty among buyers. Automobile manufacturers are currently working on upgrading their portfolio in order to meet the upcoming BS-6 emission regulations for which they have invested a substantial amount. Government’s regulations to ban older diesel and petrol vehicle with no concrete scrappage policy is also keeping the buyer away from showrooms.
In the midst of this, comes the massive push for electric vehicles by the central government. The Rs 10,000 crore FAME II scheme provides incentives for all-electric vehicles but only for commercial use. The benefits only extend to private electric two-wheelers which currently are not able to offer the same practicality and convenience as conventional two-wheelers. Though there are generous incentives for electric vehicles, nothing concrete has been done to promote hybrid vehicles in India which are considered to be an essential step in the transformation from conventional powered vehicles to electric ones.
