New Delhi: The automobile industry recorded its worst-ever sales decline in two decades in 2019, with an unprecedented slowdown hampering vehicle offtake across segments, according to industry body SIAM.
As per data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday, all vehicle segments reported de-growth last year as low consumer sentiments, weak rural demand and economic slowdown took toll on demand.
Overall wholesale of vehicles during the year across categories, including passenger vehicles, two-wheelers and commercial vehicles, saw a decline of 13.77% in 2019 at 2,30,73,438 units as against 2,67,58,787 units in 2018.
This is the worst fall in sales since the industry body started recording monthly and yearly sales data in 1997. The previous lowest was recorded in 2007 when overall sales had declined by 1.44%.
Similarly, total passenger vehicle sales during 2019 declined by 12.75% to 29,62,052 units as compared with 33,94,790 units a year ago. This is the worst performance in the segment since 2013 when sales witnessed a dip of 7.49%.
Two-wheeler sales also saw a dip of 14.19% last year to 1,85,68,280 units as compared with 2,16,40,033 units in 2018. Likewise, total commercial vehicles saw a dip of 14.99% to 8,54,759 units as against 10,05,502 units in 2018.
"Challenges remain for the auto industry despite the government bringing in several growth enablers. GDP growth rate remains an area of worry as commercial vehicle segment is clearly linked to it. Besides, low demand from rural areas continues to be a matter of concern," SIAM President Rajan Wadhera told reporters here.
In passenger vehicles, utility vehicles are driving sales as other segments are not performing that well, he added.
When asked about the 2020 outlook, Wadhera said the situation is going to remain tough due to impending changeover to the BS-VI emission regime.
"We expect prices of commercial vehicles to go up by 8-10% due to BS-VI norms and it is going to impact demand. But, if economic growth is there, this factor would not be such a sore point," Wadhera said.
Similarly, passenger vehicles would see cost increase in range of 3-7%, which would also act as an dampener for sales growth, he said.
"So, growth in the segment is expected to remain flat. In two-wheelers, low demand from rural areas continues and challenges are expected to remain going ahead as well," Wadhera said.
He further said if the economy grows at around 6-7%, the auto sector could see a return to growth rates witnessed four quarters ago.
When asked if job losses witnessed in various industrial sectors, such as auto and telecom, have had an impact on demand slump, Wadhera said, "Yes."
The auto industry body also said the positive sentiment that was witnessed during the festive season has not sustained with retail sales in December coming back to negative.
Commenting on the industry's Budget expectations, he reminded of the long-standing demand of reducing GST rate to 18% and introduction of scrappage policy to spur demand.
In December, domestic passenger vehicle sales declined 1.24% to 2,35,786 units in December from 2,38,753 units in the year-ago period.
Domestic car sales were down 8.4% to 1,42,126 units as against 1,55,159 units in December 2018, according to SIAM.
Market leader Maruti Suzuki India posted a growth of 2.49% in its passenger vehicle sales in December at 1,22,784 units. Hyundai Motor India saw a decline of 9.84% at 37,953 units, while Mahindra & Mahindra posted a growth of 3.94% at 15,686 units.
Motorcycle sales last month declined 12.01% to 6,97,819 units as against 7,93,042 units a year earlier. Total two-wheeler sales in December declined 16.6% to 10,50,038 units compared to 12,59,007 units in the year-ago month.
In two-wheeler segment, Hero MotoCorp posted a decline of 5.63% at 4,12,009 units in December. Honda Motorcycle and Scooter India (HMSI) saw its sales drop by 2.26% at 2,30,197 units, while TVS Motor Co witnessed a decline of 25.09% at 1,57,244 units.
Sales of commercial vehicles were down 12.32% to 66,622 units in December, SIAM data showed.
Vehicle sales across categories registered a decline of 13.08% to 14,05,776 units from 16,17,398 units in December 2018, it added.
On the other hand, overall retail sales stood at 16,49,954 units in December, down 14.26% from 19,24,297 units in 2018.
