The Indian automobile industry may be passing through one of the most extended periods of slump. The year-on-year (YoY) sales of vehicles being reported by the major automotive companies in the country show a declining trend and, in some cases, the drop is significant. The top car and commercial vehicle makers, Maruti, Hyundai, Toyota and Tata Motors, all said their sales in June 2019 are much below the levels they sold in June 2018. The only one to report a positive figure is Mahindra which claims a 4% increase but only in the passenger vehicles it makes not its core segment, commercial vehicles.
Coming to the absolute figures and percentages, Maruti Udyog 1,14,861 cars in June 2019, which is approximately 15% down from the 1,35,662 it sold last year. The highest drop is seen in its entry level segment comprising the Alto and Wagon R models. Against a figure of 29,381 recorded last June, this year, these two models together accounted for just 18,733 a steep 36%+ decline. The difference in the sales figures of the mid-segment and utility vehicle models has been more moderate, in the 8 to12% range.
Similarly, the Korean automaker and the No. 2 ranked player industry in the country, Hyundai Motor India Ltd., could sell only 42,007 units in June 2019 against 45,314 it managed to sell same month last year.
As mentioned, Mahindra&Mahindra, is an exception to this trend clicking a marginal 4% increase in the number of passenger vehicles sold last month, but their commercial and utility vehicles still showed a decline, though the difference was not substantial.
Tata Motors is another company that has said its passenger vehicles sales went southward in June this year and the drop is as high as 27%. Toyota Kirloskar too has showed a 19% fall in sales.
There are different reasons being attributed to this slowdown in the automobile sector. It could also be a combination of factors affecting the economy. The continuous failure of monsoon for successive years does impact the consumer market in India. There has been pressure on the employment situation with the figures for unemployment being reported one of the highest although it is not certain how much of an effect that can have on the sales of cars, still considered a luxury item.
Some experts point out that even the impending introduction of BS-VI emission standards could have led to some car dealers not stocking up the cars in their showrooms. Finally, many cities in the country are now serviced well by the app-based hail-a-ride cab operators and a section of the population is getting sold on the idea that owning a car may not be all that essential for the family to move out. Some car makers are however, hopeful of a turnaround in the second half of the year.