NEW DELHI: Despite a host of year-end discounts on passenger vehicles (PVs), its sales declined 1.2 per cent to 235,786 units in December, according to the data released by SIAM. Total auto sales during the month declined by over 13 per cent to 1,405,776 units as demand for two-wheelers and commercial vehicles (CVs) remained bleak.
Reeling under major slowdown for over a year now, India’s auto industry recorded its worst-ever sales decline in two decades in 2019. According to the data, overall auto sales in 2019 declined by 13.77 per cent at 2,30,73,438 units as against 2,67,58,787 units in 2018.
The association informed that this is the worst fall in sales since it started recording monthly and yearly sales data in 1997. The previous lowest was recorded in 2007 when overall sales dipped by 1.44 per cent. The year was also unique as all vehicle segments reported de-growth on the back of weak rural demand and slowdown in economic activity.
Going forward these factors along with transition to BS-VI emission norms from April 1, 2020 will impact demand for automobiles, said Rajan Wadhera, president, SIAM.
“While we have seen some recovery, a lot will depend on future GDP growth. If GDP grows at and over 6 per cent from now, there would be some recovery in demand for automobiles, especially for commercial vehicles,” Wadhera said.
He added that prices of BS-VI compliant CVs can go up by 8-10 per cent and prices of BS-VI complaint PVs can go up by 3-7 per cent. “Most automakers will be passing this increased cost to consumers. We have seen when prices go up to this extent, demand is impacted. The government should lower Goods and Services Tax so that auto sales do not get affected,” Wadhera said.
Coming to December figures, car sales fell 8.4 per cent to 1,42,126 units as against 1,55,159 units in December 2018, while two-wheeler sales in declined 16.6 per cent to 10,50,038 units compared to 12,59,007 units in the year-ago month.