An economic slump in the Indian Corporate Sector, financing issues, elections and a general negative buying sentiment led to the worst automobile sales in two decades.
2019 has been a year the automotive industry would like to forget. The automobile industry saw its worst times, dropping at its lowest in terms of sales in two decades. All segments of passenger vehicles including cars, hatchbacks, SUVs and even two-wheelers witnessed a major decline. The Indian corporate sector itself saw an economic slump and then there were financing issues, elections and a general negative buying sentiment, all of which led to an overall slowdown in the industry. Every major car manufacturer witnessed a de-growth but new players like Kia and MG Motors have managed to do fairly well even in the slowdown.
The industry saw the worst period in the month of August, 2019, according to the data released by SIAM. Overall passenger car sales dropped by 31.57% in August with 196,524 units sold compared to 287,198 units in August 2018. The industry still saw some respite during the festive season when a slew of discounts, benefits and financing schemes helping the car makers improve their retail sales. A similar strategy at the end of the year with year-end discounts also helped car makers make some decent sales number.
The month of December still saw most manufacturers report a negative growth, except, there was a respite somewhere. Tata Motors announced its sales report for December 2019. The company sold 44,254 units (PV + CV) in the domestic market, a decline of 12% in volumes. Similarly, Toyota registered a sale of 6544 units in December 2019 witnessing a drop of 45% in domestic volumes. Maruti Suzuki, however, was one of the few manufacturers to see an uptick in December sales. the company recorded a growth of 3.5% in the last month of the year selling 125,735 units in the domestic market. That was after months of recording negative growth consecutively.
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With respect to year-to-date sales as well, Tata’s sales for FY2020 (April-December) witnessed a 30% decrease in volumes. They sold 347,796 units, as opposed to 497,972 units sold during the same period last year. Even for Maruti Suzuki, sales between April-December 2019 saw Maruti sell 11,00,698 units as compared to 13,24,837 units during the FY2019, thereby witnessing a drop of 16.9%.
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All carmakers including Tata, Maruti Suzuki, Toyota and Hyundai have also made efforts to liquidate BS4 stocks as the industry approaches the BS6 transition deadline. Maruti has already sold over 200,000 units of BS6 compliant vehicles. Other carmakers are gearing up to commence production of the updated vehicles ahead of the March 2020 deadline.
