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Letter to BS: 31% drop in car sales is a wake-up call for govt, industry

I doubt that festival sales this year will really perk up despite the big discounts most auto manufacturers are bound to announce

Business Standard 

Auto slowdown
Representative Image

Apropos your front page report, “Passenger vehicle sales plunge 31 per cent, steepest in two decades” by Arindam Majumder (August 14); the 31 per cent drop in car sales is a harsh wake-up call for both the government and the industry. The fortune of the auto industry is usually a good indicator of the overall health of the economy because it has a deep connect with several other sectors, both in manufacturing and services. The auto industry, being a big job creator, has added to the woes and has spread the sentiment of gloom all around.

The accompanying chart, “Accelerating decline”, shows a major slide during FY19 in the sales of commercial vehicles as well as two- and three-wheelers. This makes the situation much worse. The Society of Indian Automobile Manufacturers (Siam) is right in raising an alarm. The Automotive Component Manufacturers Association of India has already raised the issue on several occasions and, I am sure, it will have to say far more in its forthcoming annual session.

Some companies expect a turnaround in the next fiscal but Siam Director General Vishnu Mathur sounds more realistic when he says “you can never say this is the worst”. I doubt that festival sales this year will really perk up despite the big discounts most auto manufacturers are bound to announce. Only holistic measures to give a push to industry as a whole — badly needed at this stage — will change the fortunes of the crucial auto industry.

Krishan Kalra, Gurugram


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First Published: Thu, August 15 2019. 20:41 IST
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