NEW DELHI: Continuing its downward spiral, domestic Passenger Vehicle (PV) sales declined for the eleventh consecutive month in September. According to data from the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales dipped by 23.69 per cent in September 2019 to 2,23,317 units against 2,92,660 units sold in the year-ago period.
While the Indian automobile history has no record of such an extended slowdown period before, SIAM said they are seeing signs of a turnaround. “There has been an uptick in consumer sentiment in the latter half of September with the onset of the festival season, clarity on Goods and Services Tax (GST) rate cut and a normal monsoon. We still cannot say that the worst is over, though all indications suggest that going forward, there will not be a worst-case scenario,” said Rajan Wadhera, president, SIAM. Wadhera said in the worst-case scenario, there will be more job cuts in the sector, with OEMs reducing their production levels further.
According to Wadhera, the recent measures taken by the government to counter the economic slowdown, pre-BS VI buying, and most importantly, implementation of a Vehicle Scrappage Policy, especially for commercial vehicles which are 15 years old and above, will provide a huge growth impetus to the industry. However, there also exist challenges such as the absence of GST benefits, low consumer sentiment in the short-term, inventory liquidation, affordable finance and availability of BS-VI fuel well in advance.
Lower consumer sentiment in rural India also impacted two-wheeler sales, which fell 22.09 per cent to 16,56,774 units in September 2019 compared to 21,26,445 units a year ago. Owing to lack of economic activity, commercial vehicle sales were down 39.06 per cent to 58,419 units in September 2019 against 95,870 units sold in September 2018.