Automobile sector faces major drop in sales

The automobile companies of India have noted a significant drop in its sales in the last few months. The major automobile companies have published a report on their monthly sales and the figures for the last few months are not quite encouraging for this sector. All the major carmakers like Maruti Suzuki, Hyundai, Mahindra and Honda have suffered a drop in their sales during the past few months. Companies like TVS and Royal Enfield who manufacture two wheelers are experiencing the same thing as well. Passenger vehicle sales have gone down by 31.57 per cent year-on-year to 196,524 units in the month of August, according to reports published by Society of Indian Automobile Manufacturers (SIAM). Car sales have dropped to 115,957 units, which is a 41.09 per cent drop. This drop in the sale’s figures is the worst ever since the late 90’s. Sales of two-wheelers too have declined by 22.24 per cent and to 1,514,196 units. Reliance Securities Senior Research Analyst Mitul Shah said, "Overall economic slowdown coupled with delayed monsoon and higher monsoon deficit in few regions have impacted rural demand. Moreover, liquidity issue to some extent and inventory correction for better business viability at dealers' end have resulted into sizable volume decline across the automobile segment. We expect the slowdown to continue in the second half of FY20. The BS-VI transformation and sharp price increase related to BS-VI would keep automobile sales under pressure during the first half of FY21, and therefore we expect any sizable revival only by mid-FY21”.

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