Amid fears of the worst kind of economic slowdown beginning to settle down in the global economy, among the worst-hit sectors, it is reported, has been the automobile space. And this, truth be told, has largely been a scenario that’s recurring in the past few months. India, no stranger to a burgeoning climate of automobile launches, also reported a sharp decline in automobile sales in the last month.
Apparently, as it turns out, most of the leading automobile manufacturers have reported a sharp decline in automobile sales in the bygone month of August.
Fundamentally, from a global standpoint, it’s the automotive space that lies at a curious crossroads anyways as one continually sees a shift in car-ownership pattern with many opting to distance from new car acquisition.
Perhaps there’s more than just the constant occurrences of urban traffic snarls in the developing world behind this leading change in car ownership patterns.
India, which is easily one of the most competitive market places for automobile players from around the world has opted, from the last half a decade, to go for urban ride-sharing and ride-service hailing.
But what exactly transpired in the month of August? The likes of Maruti Suzuki India, Hyundai, M&M, Tata Motors, and Honda, among the leading and most-selling brands, reported a double-digit decline in sales.
Could this be setting the precedent to the worst kind of fiasco that might strike the others in the Automotive space? But while that’s a situation that the coming times may sufficiently answer, here is what the industry experts believe.
Implicit in the sharp decline in automotive sales, it is believed, are several floods that took place in different states of India, while unfavourable exchange rates may also have contributed toward the lack of considerable sales in the previous month.
Leading economic and business affairs daily, Live Mint, carried interesting highlights that underline the plight of leading Automotive brands.
It shared, while Maruti reported a 33 percent drop in August sales at 1,06,413 units, the sale of passenger vehicles by Tata Motors fell 58 percent during the month under review.
Similarly, Honda Cars India and Toyota Kirloskar Motor (TKM) sales dropped 51 percent and 21 percent, respectively.
Commenting on the sales performance, Tata Motors President Passenger Vehicles Business Unit Mayank Pareek said the market continued to be challenging, but the company has focused on improving its retail sales, which saw an uptick of 42 percent.
Furthermore, if you were looking for which particular cars (in various segments) suffered from a complete lack of sale, then be mindful of the following:
Sales of the compact segment and hatchbacks, including models such as Swift, Celerio, Ignis, Baleno, and Dzire, fell 23.9 percent at 54,274 units as against 71,364 cars in August last year.
Mahindra and Mahindra (M&M) total sales dipped to 36,085 units in August as against 48,324 units in the corresponding month last year.
But all that said, a question beckons to be asked. Can the automotive sector be revived amid a time of fledgling growth? It is believed that among the leading lights of the government, Finance Minister Nirmala Sitharaman has suggested the following steps to chart a recovery for a sector that if not revived, maybe down in the doldrums:
Yet, a question that will require some answering is whether the successful implementation of the aforementioned steps would indeed spur the industry demand?