The auto sales slowdown has also taken a toll on the jobs of those associated with auto companies or ancillary sectors.
The ongoing slowdown in auto sales is not taking a turn for the better even after nine months of continuous decline. With an overall sales dip of 13.57 per cent in April-July 2019 as compared to the corresponding period last year and the Passenger Vehicles sales alone down by over 21%, the auto industry is witnessing a major demand slump for some time now. The production of vehicles has seen degrowth of over 10% with over 97 lakh vehicles produced in April-July 2019 while over 1 crore vehicles were produced in April-July 2018, SIAM (Society of Indian Automobile Manufacturers) report said. The overall vehicles include Passenger Vehicles, Commercial Vehicles, Three-Wheelers, Two-Wheelers and Quadricycle. Financial Express Online has sent queries to SIAM for further comments.
The auto sales slowdown has also taken a toll on the jobs of those associated with auto companies or ancillary sectors. Auto and ancillary sectors have recorded a 17% dip in jobs in July 2019, compared to the previous year, according to a recent Naukri JobSpeak report.
Shedding further light on the automobile demand slump, the report said that in Passenger Vehicles, the sales for Passenger Cars, Utility Vehicle & Vans got reduced by 26.45 per cent, 7.22 per cent and 30.97 per cent respectively in April-July 2019 as compared to the same time last year. For Commercial Vehicles, the most sales decline was seen in Medium & Heavy Commercial Vehicles with a drop of over 21.63 per cent. Purchases for Two-Wheelers also took a hit and considerable lesser purchases were made for Scooters, Motorcycles and Mopeds.
While domestic sales have not spelt success for automobile companies and dealers, the industry recorded a meagre 1.17 per cent higher sales in exports for Passenger Vehicles and Two Wheelers.
The auto sales slowdown coincides with consumer demand slump which has impacted growth and revenues of major FMCG companies. Liquidity crunch, NBFC crises and rural distress have been largely agreed upon reasons for the slowdown. The auto sector has sought help from the government in the form of tax cuts to revive growth.