Published 12:05 IST, September 2nd 2019
Auto sector slowdown: industry giants report sharp drop in sales
The auto sector witnessed a set of reforms introduced by Nirmala Sitharaman to help boost sales domestically; industry went through a sharp decline of 36%
The auto sector has been facing a sharp decline in sales in the month of August. The domestic sales in the automobile industry have witnessed a decline of 36%. All the major players have reported a significant decline in their respective sales. Tata Motors, Mahindra and Mahindra's, Maruti Suzuki India, Hyundai and Honda reported a slump on September 1.
While Tata Motors sales fell 58% under review, Mahindra and Mahindra's local sales declined 26% on a year-on-year basis. Similarly, Maruti Suzuki reported a decline of 33%. Hyundai Motor India sold 38,205 units, a decrease of 16.58% from 45,801 units sold in August 2018. Honda's sales, on the other hand, witnessed a sharp drop of 51%.
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Auto industry leaders speak
Mayank Pareek, President of Tata Motors Passenger Vehicles Business Unit responded to the numbers. He stated that while the numbers prove to be challenging, the company has focused on improving its retail sales, which saw a pick up of 42%. The sector has been facing a slowdown the past few months due to multiple reasons. Those include high Goods and Services Tax (GST) and liquidity crunch, major floods across the country and a stagnant economic growth have all contributed to the decline of sales in the auto industry.
Toyota Kirloskar Motor (TKM) Deputy Managing Director N Raja said "The consumer sentiment continues to be muted in the month of August, with customers deferring their purchase of vehicles. Severe floods across states has also hurt the demand in the industry. Unfavourable exchange rate is not helping our cost."
Nirmala Sitharaman on the Auto sector
Finance Minister Nirmala Sitharaman announced several measures to help the industry. The highlights of those measures were Sitharaman's core focus on lifting the ban from government departments to buy new vehicles, doubling the tax benefit from auto-makers and postponing the revision of the one-time registration fee. Nirmala Sitharaman also reassured that BS-IV compliant vehicles would continue to run through the entirety of their registration period. Rajeev Kumar, the Finance Secretary further tweeted a table which resonates the ways the government plans to boost the economy.
(With inputs from PTI)
Updated 15:35 IST, September 2nd 2019