Auto Industry in slump; records biggest fall in 8 years

The country’s auto industry is going through a bad phase these days. Due to the poor sale of Passenger Vehicle (PV), the industry is constantly hitting new lows The situation is that the country’s largest auto maker Maruti Suzuki has reduced its production by about 39 percent in the last three months. According to the auto industry experts, if such conditions continue, the clouds of crisis can be on jobs.

Major fall in April

Passenger vehicle sales in the country have declined 17 percent in April. This is the biggest fall since October 2011. Sales in October 2011 were down by 19.87 percent. According to data released by the Society of Indian Automobile Manufacturers (SIAM), the sales of passenger vehicles in domestic market fell 17.07 percent in April, 2019 to 2,47,541 units. This means that in April only about two lakh 47 thousand passenger vehicles have been sold. Earlier, in April 2018, sales of 2,98,504 passenger vehicles were made.

Trend continues for the past three months

Considering the figures for the last three months, in April, domestic passenger vehicle sales were down 17 percent and car sales plummeted about 20 percent. Earlier, in March 2019, passenger vehicle sales were down by almost 3 percent and car sales fell 6.87 percent. Similarly, in February this fall was 1% and 4.33% respectively. Along with the sale of cars in the country, the sales of two-wheeler has also decreased.

According to statistics, sales of all major vehicle categories, including Two Wheeler, Commercial, declined in April. In April, 2019, sales of vehicles in different categories dropped 15.93 percent to more than 20 million. In April 2018, the figure was 23 lakh. Auto industry experts say that in the last 10 years, we did not see the decline in sales in all categories.

The condition of major auto companies

Sales of Maruti Suzuki India (MSI), the country’s largest auto maker, fell by 19.61 per cent to 1,31,385 units in April. Hyundai Motor India sales fell 10.12 percent to 42,005 units. In addition, Mahindra & Mahindra’s passenger vehicle sales declined by 8.52 percent. In two-wheeler, the sale of Hero Moto Corp fell 12.10 percent to close to 5 lakh 34 thousand. Similarly, Honda Motorcycle and Scooter India’s motorcycle sales fell 25.77 percent to 1,57,569 units.

Reasons for declining sales

SIAM director general Vishnu Mathur said that sales have been affected due to negative factors such as cash crisis and rising costs of insurance. At the same time, the sentiment has also weakened due to the elections. Explaining the reason for the reduction in production, Mathur said that the stock prepared in the festival season being still in the showrooms has also put a brake on production. This is the time of auto companies’ inventory correction, so companies are removing old stock at the present time. The second reason for the production cut is that in the future, companies can shut down some models due to new safety and BS 6 norms.

What will be its effect

Mathur says that if the situation remains the same, the clouds of crisis can also be mounted on jobs. He said that there is no report of job cuts in the industry right now. But if the slowdown continues this way, then there may be a threat to jobs. However, the Director General of SIAM hopes that when the election is over, after the formation of a new government many things will improve and stability will come.