Auto Sector Sees Worst Fall in Car Sales Since 1997: Industry Body

Sales declined in all vehicle segments last year due to weak rural demand and aneconomic slowdown.

Domestic sales of cars across all categories in December 2019 fell by 13.08 per cent. 

(Photo: Reuters)

The automobile industry recorded its worst-ever sales decline in two decades in 2019, with an unprecedented slowdown hampering vehicle off-take across segments, according to industry body Society of Indian Automobile Manufacturers (SIAM).

As per data released on Friday, 10 January, all vehicle segments reported de-growth last year as low consumer sentiments, weak rural demand and economic slowdown took toll on demand.

Overall wholesale of vehicles during the year across categories, including passenger vehicles, two-wheelers and commercial vehicles, saw a decline of 13.77 percent in 2019 at 2,30,73,438 units as against 2,67,58,787 units in 2018.

Sales of passenger vehicles - including passenger cars, utility vehicles and vans-have declined 1.2 percent to 235,786 units in December 2019.

The report states that this is the second straight month of declines for passenger vehicles after a minor uptick in October 2019. Out of the total units sold, 142,126 passenger cars were sold during December as against 155,159 in 2018.

Lowest Sales Since 2007

This is the worst fall in sales since the industry body started recording monthly and yearly sales data in 1997. The previous lowest was recorded in 2007 when overall sales had declined by 1.44 percent.

Similarly, total passenger vehicle sales during 2019 declined by 12.75 percent to 29,62,052 units as compared with 33,94,790 units a year ago. This is the worst performance in the segment since 2013 when sales witnessed a dip of 7.49 percent.

“Challenges remain for the auto industry despite the government bringing in several growth enablers. GDP growth rate remains an area of worry as commercial vehicle segment is clearly linked to it. Besides, low demand from rural areas continues to be a matter of concern,”

SIAM President Rajan Wadhera

Two-wheeler sales also saw a dip of 14.19 percent last year to 1,85,68,280 units as compared with 2,16,40,033 units in 2018.

Drop in Sales Due to Rise is Emission Standards

Overall production in the domestic market decreased 5.2 percent year-on-year to 1,816,112 units. That included passenger vehicles, commercial vehicles, and two- and three-wheeler’s.

The passenger car sales declined by 23.59 percent in April-December period of 2019 compared with April-December period of 2018.

“From 1 April after implementation BS-VI norms cost of cars will increase and and that will lead to decline in demand. We want that government should lower Goods and Services Tax (GST) so that auto sales do not get affected,”

SIAM President Rajan Wadhera

Automobile exports from April-December 2019 however rose by 3.86 percent, wherein passenger vehicle and two-wheeler exports grew 5.89 percent and 6.87 percent respectively.

According to SIAM press release, commercial vehicle and three-wheeler’s have shown a consistent decline of 38.74 percent and 8.8 percent respectively over the past year.

Rise is Sale of Utility Vehicles

Sales of utility vehicles has increased by 30.02 percent . A total of 85,252 utility vehicles were sold in December 2019, as against 65,567 units in December 2018. But the sales of vans plunged 53.36 percent to 8,408 vehicles.

The sale of passenger vehicles declined by 16.40 percent in April-December 2019 in comparison to April-December period of 2018

Sales of commercial vehicles, which include medium and heavy commercial vehicles also dropped 31.7 percent year-on-year to 21,388 units. Light commercial vehicles had a small rise with just 1.26 percent increase in sales.

(With inputs from PTI and NDTV)