The sale of domestic passenger vehicles continued to slump in December, indicating a lack of spending by consumers amid an economic slump, PTI reported on Friday. The sales declined 1.24% to 2,35,786 units in December from 2,38,753 units in the same period a year ago, while domestic car sales fell 8.4% to 1,42,126 units as against 1,55,159 units in December 2018, said the Society of Indian Automobile Manufacturers.
Meanwhile, sales of commercial vehicles, including medium and heavy commercial vehicles, tumbled 31.7% year-on-year to 21,388 units, reported NDTV. Two-wheeler sales dropped 16.6% to 10,50,038 units.
Overall, in 2019, passenger vehicle sales declined 12.75% over 2018 to 29.62 lakh units, reported BloombergQuint, while passenger car sales dived 18.91% to 18.2 lakh units. However, 4.78% more utility vehicles – or 9.84 lakh units – were sold.
“From April 1 after implementation BS-VI norms cost of cars will increase and and that will lead to decline in demand,” NDTV quoted SIAM President Rajan Wadhera as saying, when asked about his expectations from Budget 2020. “We want that government should lower Goods and Services Tax so that auto sales do not get affected.”
The Indian automobile industry experienced its worst year in two decades in 2019 as sales of passenger vehicles fell below the three million mark for the first time since 2016. A news report in August said the industry had lost 15,000 jobs in the preceding quarter and almost 300 dealerships closed in the 19 months before that. The decline in consumer confidence, coupled with a crisis in non-banking finance companies, have caused a steep fall in passenger car sales. The declining sales in the automobile sector are indicative of a larger slowdown in the economy. Earlier this week, the government forecast that that Indian economy was expected to grow 5% in the 2019-’20 financial year compared to 6.8% last year. If this bears out, it will be the slowest annual growth in Gross Domestic Product since 2008-’09.