Passenger Vehicle Sales In April Fell The Most In Nearly Eight Years, Says SIAM
Car and utility vehicle sales fell the most in nearly eight years as tepid sentiment continued to weigh on the auto sector.
The domestic passenger vehicle sales declined 17.07 percent to 2,47,541 units in April, according to data released by the Society of Indian Automobile Manufacturers. A steeper decline was last seen in October 2011, when the passenger vehicle sales were down by 19.87 percent, it said.
“There has been a gradual decline in sales since the last six months that started with Kerala floods, followed by insurance costs going up, petrol prices, registration issues for taxis, elections and others and all of that has weakened consumer sentiment,” Vishnu Mathur, director general of SIAM, told BloombergQuint in an interview.
Domestic car sales in April declined by 19.93 percent to 1,60,279 units. Besides, all segments skid to negative for the month of April.
Mathur, however, is optimistic that the demand will pick up in the second half of the year. A stable government after the general election, inventory correction—which has already started in the industry—and with pre-buy prior to the BS-VI norms could have a positive impact on the sector, he said.
The carmakers’ body requested for a Goods and Service Tax rate cut from the government in the wake of price increase across segments due to emission and safety norms. “This is the right opportunity for the government to participate by reducing the overall GST rates, so that a part of the increased vehicle cost is taken care by reduced GST,” Mathur said, adding that it is not a good idea to let this industry suffer in such steep degrowth.
If the degrowth continues for the next one to two years, there could be possibility of layoffs in the industry as well, he warned.