- Auto sales in India declined the most in more than two decades in 2019 as per a report by SIAM.
Auto sales in India declined the most in more than two decades in 2019, as slowing economic activity, high vehicle prices, and stricter lending rules affected the demand.
In passenger vehicles, a declining speed in December, albeit at a low base, and an increase in the rolling average over the last three months of the year led the industry to conclude that the worst could be over.
According to data released by the Society of Indian Automotive Manufacturers (SIAM) on Friday, sales across the automotive sector from passenger vehicles and commercial vehicles to two-and three-wheelers dropped 13.77 percent to 23.07 million units in 2019. Since the industry started reporting numbers, passenger vehicles and two-wheeler sales fell the most, from 12.75 percent to 2.96 million and 14.19 percent to 18.57 million units respectively last year. The fall in commercial vehicles was the most in six years at 15%, to 854,759 units.
Passenger vehicle sales such as cars, utility vehicles and vans dropped from 1.24 percent to 235,786 units in December. Commercial vehicle and two-wheeler sales dropped by 12.23 percent to 66,622 and 16.6 percent to 1,05 million respectively, while overall sales fell 13.08 percent to 1,41 million respectively. “The three-month rolling average suggests a pattern reversal in passenger vehicles,” said SIAM president Rajan Wadhera. “Inquiries have begun to rise but feelings have not improved to a point where we can see progress. That will take some more time. “He added that the downturn in the wider economy and poor consumer sentiment continues to have an effect on fundamental demand.
New releases in the category of utility vehicles helped draw some purchasers. While passenger car sales fell by 18.91 percent for the year, utility vehicle sales increased by 4.78 percent. During the first nine months of the current fiscal year, utility vehicles accounted for 34 percent of passenger vehicle sales on the Indian market during April-December, compared to 13 percent in fiscal 2011.
Due to the higher insurance premium and the implementation of strict safety rules, a sharp increase in acquisition costs hit the two-wheeler sales. Although scooter sales fell by 16.03%, motorcycle sales fell by 12.92%.
Wadhera expects demand to rise on April 1, as prices are set to rise in the coming months ahead of the transition to BS-VI emission standards.
“BS-VI will increase vehicle costs by 8-10 percent. This cost will not be fully absorbed by the individual organization and will have to be passed on to customers. That will affect demand, “he said. “We expect some of this quarter to be pre-buying. If the government announces the policy of scrapping vehicles, that will help the industry.