April angst: Slide in auto sales steepest in 8 years

S Ronendra Singh New Delhi | Updated on May 13, 2019 Published on May 13, 2019

Car sales down 20%;scooters skid by 26%


The bumpy ride continues for the automobile industry, as sales during April, the first month of the current financial year, continued to decline. This is the fifth straight month that the industry has witnessed a slide in sales.

The domestic passenger-vehicle (PV) segment is perhaps the worst hit, as it reported a 17 per cent plunge in sales — from 298,504 units a year earlier to 247,541 in April — the steepest fall since October 2011. This drastic fall is attributed to a variety of factors including increased cost of ownership — which in turn was driven by high fuel prices and interest rates, and rise in insurance costs — and a liquidity squeeze that dampened buyers’ sentiment.

Election result critical

Industry watchers expect the slowdown to continue till the end of the first quarter with the outcome of the general elections being the key event to watch out for.

Apart from PVs, all other categories too reported a drastic fall in domestic sales during April on a year-on-year (YoY) basis, a report from the Society of Indian Automobile Manufacturers (SIAM) showed.

“Overall, the market has been negative since December. Sales have been slow, with PV sales staying in the negative zone since July last year. In October, they grew by 1.55 per cent, but again retreated to negative territory after that,” Vishnu Mathur, Director General, SIAM, told BusinessLine.

Sales of passenger cars grew marginally in October (0.38 per cent), but fell again from November. Commercial vehicles sales were positive in March, but fell by around 6 per cent in April.

Domestic car sales during April declined 20 per cent Y-o-Y to 1,60,279 units as against 2,00,183 in the corresponding month last year. Scooter sales also declined 26 per cent to 4,89,852 units during the month compared with 6,61,007 units in April 2018.

Similarly, motorcycle sales declined 12 per cent to 10,84,811 units last month compared with 12,30,046 units in April last year.

“Apart from the the auto sector, the FMCG segment is also witnessing a slowdown. Discretionary spendings are being held up. Maybe things will improve after the election results are out and a stable government is formed. We expect things to get better in the second half,” he said.

He added that the manufacturers have also cut down their production over the last few months so that there is no pile up of inventories. The market is expected to improve in the latter half of the year during the festive and wedding seasons.




Published on May 13, 2019
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