The situation in the automobile sector is becoming dire with sales of passenger cars—the largest segment by volume—falling 41.09% in August from a year ago, according to data released by industry body Society of Indian Automobile Manufacturers (SIAM) on Monday.
The auto sector has seen falling sales for more than a year as market sentiment continued to remain weak due to the transition from Bharat Stage (BS) IV to BS VI emission standards and fuel price volatility. The sales slump in August is the worst in two decades, said SIAM.
Sales of passenger vehicles—which include cars, utility vehicles, and vans—fell 31.57%. Vans alone recorded a sales drop of 47.36%—its worst performance ever.
In August, the country’s largest automaker Maruti Suzuki reported a 36% year-on-year drop in sales to 93,173 units. India’s second largest carmaker, Hyundai Motor India, too reported a 17% fall in sales, while Tata Motors’ sales during the month slumped 60%.
Sales of two-wheelers—the second-largest segment by volumes—declined 22.24% to 1,514,196 units. Sales of three-wheelers fell 6.93% while commercial vehicle, which is generally an indicator of the economic activity in the country, reported a drop of 38.71% in August this year.
Total sales fell 23.55% to 1,821,490 units. Total production, too, fell 18.45%. Only exports showed a slight recovery. In August, total exports revived by 2.37% YOY while in July, exports were at 4.22% growth YOY.
Recently, Union minister of road transport and highways Nitin Gadkari said that the government has no plans to ban petrol and diesel vehicles and is also considering a cut in the goods and services tax (GST) on hybrid vehicles to aid the auto sector.
“The slowdown is also impacting employment potential as well as the growth of the country and hence needs immediate intervention. The slowdown has been caused by issues related to global economy, and demand and supply,” Gadkari had said at the annual SIAM convention.