Auto Sector Crisis
Auto Sector Crisis
Auto Sector Crisis
The domestic passenger vehicle sales of Tata Motors have declined 58 per cent to 7,316 units in
August 2019.
Mahindra & Mahindra's total passenger vehicle sales have dropped 32 per cent to 13,507 units in
August 2019.
The downturn in the Indian automobile sector refuses to subside with the major carmakers
reporting negative sales numbers in August 2019. Companies like Maruti Suzuki India,
Hyundai Motor India, Honda Cars India, Tata Motors and Mahindra & Mahindra have
witnessed their sales going down during the month, with all the hopes now pinned on the
upcoming festive season to bring any kind of cheer in the market.
The total domestic passenger vehicle sales of the country's largest carmaker Maruti Suzuki
India fell 36.1 per cent to 93,173 units in August 2019. In August 2018, the figure stood at
1,45,895 units. Hyundai Motor India's domestic sales dropped 16.58 per cent to 38,205 units
in August 2019 from 45,801 units in August 2018.
Honda Cars India saw its monthly domestic sales plunging 51.3 per cent to 8,291 units in
August 2019. The company had sold 17,020 units in the same month last year. The domestic
passenger vehicle sales of Tata Motors have declined a massive 58 per cent to 7,316 units in
August 2019 from 17,351 units in the same month last year.
Mahindra & Mahindra's total passenger vehicle sales touched a total of 13,507 units in the
domestic market in August 2019. This was 32 per cent lower than 19,758 units disposed of by
the company in August 2018.
"Poor consumer sentiments coupled with pressures coming from financial stress at the
banking sector are key reasons of buyers keeping away from showrooms in the current
scenario," Urban Science Managing Director (India) Amit Kaushik told India Today.
"Besides that, there is a lot of confusion amongst the buyers due to emission shift, electric
vehicles and so on," Kaushik added.
However, the new companies like Kia Motors and MG (Morris Garages) Motor have performed
quite well if we view their sales figures in the context of the overall slowdown in the
automobile industry. Kia Motors has reportedly sold 6,200 units of Seltos in August 2019. One
has to keep in mind that the numbers have been achieved in merely 10 days since the launch
of the vehicle on August 22. MG Motor has been able to sell 2,018 units of Hector during the
same month.
The major carmakers will now be banking on the upcoming festive season to provide any kind
of boost to the sales, with several offers being rolled out to entice more customers.
"The upcoming festive season is the only thing that all stakeholders are pinning their hope on,
so it will be a very critical event which is eagerly awaited. Historically, the festive season has
shown that sales do peak and help recover automakers' lull months and inject margins to all
players in the value chain," IHS Markit Powertrain & Compliance Forecasting Principal
Analyst Suraj Ghosh told India Today.
According to Kaushik, a temporary bubble may be experienced during the festive season but
the problem will take longer time to get settled.
Besides, the carmakers will also be hoping that the recent measures announced by the
government will spur the growth of the automobile sector. The government has said that BSIV
vehicles purchased till March 31, 2020, will remain in operation for the entire period of
registration. The implementation of the one-time registration fee has been deferred until June
2020. The vehicles acquired till March 31, 2020, will have 30 per cent depreciation. The ban
on the purchase of new vehicles by the various government departments has been removed.
Also, the government will consider a scrappage policy.
"The recent government measures are steps in the right direction, but it may not provide
immediate relief to the ailing sales numbers. The industry is currently caught in a storm of
poor customer sentiment, delayed purchases due to upcoming regulatory transition and
expectation of heavy discounts, low availability of liquidity in the market and the negative
momentum which has crept in the last 8-9 months. But if govt is willing to prolong the
measures, then it will definitely have an impact in the longer term," Ghosh said.
ALSO READ | Kia Seltos vs MG Hector: Sales numbers for August 2019 are
out and we now know who is the winner
ALSO READ | Maruti Suzuki utility vehicles cross 1 million cumulative sales
milestone