Indian automobile sector in slump
Four largest automobiles, including the largest car maker in India Maruti Suzuki, have said that auto sales have declined 20 percent in May this year compared to the previous May. This is due to a decline in the economy.
Sales of the auto industry in May also saw a huge decline. This is because the market is lacking in demand and stocks are not going out of showrooms as expected.
Maruti Suzuki, which is known as the leader of the car market, has announced a fall in May, 2019. Apart from the super cherry carrier, the company’s products have registered negative growth in the sale of all vehicles, including Ciaz, Brezza.
Maruti Suzuki recorded a decline of 22% in May, 2019. The company sold 134,641 vehicles in May, 2019. Last year i.e. in May 2018, it sold 172,512 vehicles. The company’s last lowest sale was in 2015. Sales were less than that figure this year.
Maruti’s total domestic sales declined by 23.1 percent. It was 1.63 lakh units in May last year, while this year is 1.25.
Similarly, Mahindra & Mahindra, another company, has seen a decline of 3% in total auto sales in May this year. In May last year, it sold 46,848 vehicles, while in May, 2019 it sold 45,421 vehicles.
Automobile sector president Rajan Wadhera said, “Although, the enthusiasm and demand of consumers was there before the election, but our focus was on fixing the stock.”
Car makers, including Maruti, Mahindra, Tata and Honda, sold a total of 229,294 vehicles in May 2019. This is 20 percent lower than last May.
This recession has not only come in the sale of cars. The demand for a tractor was also lower than expected. One of the biggest tractor manufacturers, Mahindra’s sales figure says that domestic sales of tractors have declined 17 percent in May. In May last year, it sold 28,199 tractors, while in May this year, 23,539 units were sold.
The condition of Tata Motors is also not different from this. Tata has recorded a decline of 26% in its domestic market. Tata sold 54,290 vehicles in May, 2018, while in May, 2019, 40,155 vehicles were sold.
Japanese automobile company Toyota also sold 12,138 vehicles in May this year, down 7.4 percent from May last year.
This fall has come in the sale of all types of vehicles. Sales of two-wheelers also declined by 5 per cent, while commercial and passenger vehicles sales declined by 8 per cent.
Car market hinges on urban income and employment. The decline in the car market is an indication that employment, currencies and loan finance markets are in crisis. Experts say that this may be a sign of recession in the economy.
Rajiv Singh, CEO of Karvy Stock Broking Limited, said, “There are many reasons for this. First, the economy has come down heavily, secondly, auto sales depend on the availability of credit and credit crunch has increased.”
Considering the speed up to mid-2015 from 2018, experts said that India would soon be the world’s third largest motor market leaving Japan and Germany behind.
Unexpectedly, consumer demand has declined in India, due to which the stocks of products have started accumulating. It is believed that soon the stock will get rid of the problem and the demand in the market will increase.
