Vehicles back in slow gear; total sales down 12 per cent in November

PUNE: Passenger vehicle sales in Asia's third biggest car market resumed their declining trend in November after a blip in the preceding month, indicating automakers are yet to recover from the worst auto slowdown in India in more than a decade.

Passenger vehicle sales, which include cars, utility vehicles and vans, fell 0.84 per cent year-on-year to 2.64 lakh units in November, the latest official data by the Society of Indian Automobile Manufacturers, or Siam, the top trade lobby, showed on Tuesday.

While car sales were down 11 per cent over last year to 1.60 lakh units, utility vehicle sales rose 32.7 per cent to 92,739 units, in a sluggish market, bringing some cheer to the slowing segment.

"There is some recovery in the passenger vehicle segment but it is too early to say if the worst is behind us," Rajesh Menon, Director General at Siam, said.

He said utility vehicles had started doing very well last month itself and that is the reason why the passenger vehicle segment is showing a lesser decline, alongside the impact of the low year-ago base, he pointed out.

"New product launches are driving consumer demand and that is clearly helping the market," Menon said.

However, commercial vehicles and two-wheelers remain a concern for the industry. "Commercial vehicles and two-wheelers are continuing to show negative growth, which means infrastructure is yet to pick up and rural demand is still lagging," Menon said.

According to McKinsey & Co, the Indian automobile sector, employing millions and contributing more than 7 per cent to India's GDP has been grappling with slowing sales since the Diwali festival season last year.

In fact, the worried and struggling automakers in the country were forced to lay-off contract workers, and dealerships also shut showrooms, which amounted to more than 2 lakh workers losing jobs.

While deep discounts and aggressive promotions lifted sales during this year's festive season in October, they were lower than last year, analysts pointed out.

The overall downturn in the automobile industry continued unabated with November total vehicle sales declining 12.05 per cent to 17,92,415 units, down from 20,38,007 units sold in November 2018.

Segment-wise, scooter sales dropped 11.83 per cent over last year to 4.60 lakh units.

Commercial vehicle sales, the barometer of economic activity in the country, fell 15 per cent over last year to 61,907 units. Motorcycle sales declined 14.90 per cent year-on-year to 8.94 lakh units. Two-wheeler sales fell 14.30 per cent.