Vehicle shipments to dealerships fall 19%, the worst drop in 19 years
NEW DELHI: The automotive slowdown intensified in July with sales that fell 18.7%, the biggest monthly drop in almost 19 years, compared to 12.3% in the previous month, leaving the industry with a massive arsenal before the festival season and generating demands for help. of the government.
The latest data published by the SIAM industry agency showed that deliveries to car dealerships and SUVs, two- and three-wheelers and commercial vehicles fell to 18.2 lakh units in July from 22.4 lakh units ago one year. The biggest drop was observed in the segment of passenger vehicles (cars and SUVs), where sales fell by 31%.
Car players blamed the economic downturn and the liquidity crisis for the fall, as wholesale dispatches to dealerships declined more in almost two decades, or since the 22% decrease recorded in December 2000.
Sales continue to fall despite car manufacturers offering gifts and discounts to attract buyers, while presenting newer models. Industry executives who met with the finance minister Nirmala Sitharaman on August 7 he described the current slowdown as the worst slowdown in the history of the industry.
Reduce GST to make vehicles affordable: Cos
Auto industry players have suggested that the government lower the GST on automobiles from 28% to 18%, arguing that it will improve affordability and may prompt people to come and buy.
Industry actors believe that feelings remain weak as stress in the economy increases. The main metropolitan markets have been affected by slower growth and the consequent loss of jobs in key industry segments such as telecommunications, IT, real estate and automobiles and components. Rural distress has only made things worse, something seen in the reversal of the demand for two-wheelers that get 50% of their volumes from smaller cities and towns.
“This is an unprecedented crisis since all categories of cars have decreased. The pain is palpable and we have seen layoffs, mostly contractual, in car factories, dealers and parts manufacturers, Vishnu Mathur, CEO of Siam told TOI.
The industry, which operates well below installed production capacity levels, says an early revival package is necessary, especially when the holiday season is approaching. “The industry is deeply concerned about the growing pressure from the low customer sentiment facing the sector. High insurance costs, rising taxes and a shortage of liquidity throughout the non-bank financial segment, tightening credit standards have significantly affected domestic sales in recent months, said N Raja, MD attached at Toyota Kirloskar Motor , He said.
The industry also said the government should reduce the tone with respect to its call to migrate buyers to electric vehicles.