| 3 minutes read

3 minutes read

Auto Sales Are Declining Since Last Few Months, Here’s Why?

| Published on June 5, 2019

Do you own a car or a two-wheeler? Or, do you plan to get one? If the answer is yes, then this is why you must think twice before you go ahead.

Why? The recent statistics have shown a decline in automobile sales. Surprised? The figures have already made the industrialists mull over the possible reasons, but no conclusion could be made.

Let us get to know some figures and the reason behind them:

Statistics: The numbers say a lot!

The overall Indian passenger vehicles (PV) wholesales has declined by 17 percent year-on-year to 2,45,599 units in April 2019 compared to 2,96,369 units dispatched in the same month last year.

A data released by the Federation of Automobile Dealers Associations (FADA) says retail sales of PV in March declined by two percent to 2,42,457 units as compared to the same period last year. Sales were at 2,47,278 units in April 2018. The sale of two-wheeler also declined by nine percent to 12,85,470 units last month compared to the 14,09,662 units it was last year.


Reason – The take-over by Uber/Ola!

In today’s India, a car is no more considered as a status symbol but rather a necessity for your work. People now believe that other means of transport for commuting to a job, work and other places is more feasible. Since the development of Ola and Uber facilities, people prefer these online services over driving a car of their own.

The easy use and instant availability of Ola and Uber have made car ownership drop in the list of life goals. Though the demand in Tier 2 and 3 towns continues to remain strong at least for the entry and mid-level options.

The Government Plays a role in Buying ‘Car’ Decision

According to RC Bhargava, Chairman, Maruti Suzuki, it is a very unusual but rather common scenario that people stop buying cars before elections, however, post-elections the sales climb the stairs. No particular reason for this has been discovered as yet.

There are chances that people hold back their purchase decisions until the elections are over, as they must be relying on any government policy change which can have a huge impact on consumers’ earnings. Due to this, there is always a lack of demand during elections.

The recent norms into play!

There is another belief that the sales might have gone down due to the car manufacturers rejigging of their models because of the new mandatory safety and upcoming emission norms.

From April 1, all cars have to comply with new safety norms that include mandatory airbags, ABS, parking sensors, seat belt reminders, and speed warning alerts. By October this year, they will have to meet the new crash test standards and by April next year, BS-6 emissions standards.

Also Read: Why Maruti Suzuki Is Facing Its Weakest Quarter In 5 Years

These are a few beliefs for the decline in the sales of automobiles. Still, no concrete reason has been able to explain the downfall of the figures.

Related Posts