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Decline in Car Sales in India Continues to Linger Around – SIAM

Mihir Gupta by Mihir Gupta
February 11, 2020
in Automobile, News
3 min read
0
Automobile industry - Next Big Brand

Car Sales in India continues to decline

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  • 1st month of 2020 witnessed the same downturn in the automobile industry for 1 and a half yeat.
  • Car sales in India dropped dipped more than 13% as per various reports rolled out.

According to recent figures given by the Society of Indian Automobiles (SIAM), there was an overall decline in car sales. Car sales in January fell 13.83% (1739975 units) as against 2019253 units sold in the same month last year.

The curve of decline in car sales in India expects to improve somewhere in October this year when the festive month begins in the country.

What Can Be Reasons for Decline in Car Sales in India?

While the Indian automobile industry being a huge one, it’s practically impossible to quote “exact’ reasons for a decline in car sales in India. But if we look at the trends and changes happening in the sector, here is what we have found:

  • The rising cost of vehicle ownership while the growth of GDP slowed down and it doesn’t seem to improve anytime soon.
  • BS-IV variants being rolled out is another major reason. Several carmakers are optimistic about their BS-VI variants, but when the decision was rolled out, a lot of BS-IV complaints had already been rolled out.
  • Indian car passengers’ trends have also witnessed a shift. A major chunk of the population has now moved towards SUVs rather than going for smaller car segments.
  • India and the world are shifting towards the electric vehicle segment.

The automobile industry is affected not only by various decisions rolled out by the authority in tax reforms, and vehicle emission norms. The industry also witnessed a shift in the tastes and preferences of Indians.

It’s probably the first-time the automobile industry is struggling to make things right when a plethora of reforms plus a change in tastes and preferences are acting as a barrier for the goodwill of car sales in India.

A decline in Car Sales in India – An Overview:

2019:

Sales across the automotive sector from passenger and commercial vehicles dropped 13.77% to 23.07 million units. Since the industry started reporting numbers, passenger vehicles and 2-wheeler sales fell the most, from 12.75% to 14.19% – from 18.57 million units to 2.96 million units.

Utility vehicles and vans also witnessed a drop from 1.24% – 235786 units in December. Commercial vehicle and 2-wheeler sales dropped 12.33% to 16.6% – from 105 million units to 66622 units.

Passenger vehicles also witnessed a decline in car sales in India. The number fell by 18.91% for the year. Except for Maruti Suzuki & Mahindra, the entire automobile sector witnessed a decline in car sales in India.

  • Tata Motors sold approx. 12785 units in 2019 as compared to 14260 units in 2018.
  • Honda cars sold 13139 units in December 2018 as compared to 8412 units in 2019.
  • Hyundai Motors sold 37953 units in December 2019 as compared to 42903 units in December 2018.

2020:

While the premium SUV segment saw growth amid dark times, it still has a very small proportion in India’s passenger vehicle segment.

According to the latest data by SIAM, overall domestic car sales in India of January month fell to 1739975 units as against 2019253 units sold in the same month previous year.

“By the second half of the next financial year, we will see better numbers. That is when the next festival season begins,” said Rajesh Menon, director general, SIAM.

Is a Decline in Car Sales Witnessed Across All Segments?

It was the 2-wheeler segment and premium segment that did satisfactory during dark times lingering in the automobile sector. Tata Motors & MG Hector together contributed to half of the sales in the premium SUV segment last year.

Tata Motors sold 15269 units last year in December. MG Motors sold 15930 units and 90% of its sales came from top-end versions. The premium SUV segment in India still has a very small proportion of passenger vehicles, merely 2%.

Ending Note:

Yes, it’s true that the Indian automobile industry is witnessing a decline in car sales. The reasons might be many and tangled with many other small-small reasons.

Talking about the future, it’s still not confirmed as to when the industry will bloom up again. In 2019, analysts were optimistic that things might have gotten better in April this year. But now the timeline is stretched in October 2020.

Let’s the best for the automobile industry in 2020.

Tags: Automobile salescar sales in IndiaDecline in car salesIndian automobile industryMahindraMaruti SuzukiSUV segment
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Mihir Gupta

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