Slowdown continues: Domestic passenger cars sales plunge 36% in July
The slump in domestic passenger cars' sales continued with the segment's off-take plunging by 35.95 per cent in July.
 
According to industry observers, high cost due to GST, low demand, lack of adequate liquidity continued to dent purchases.
 
According to the Society of Indian Automobile Manufacturers (SIAM), passenger cars sales in the domestic market dropped to 122,956 units from 191,979 units sold during July 2018.
 
Among the other sub-segments of passenger vehicles, the number of utility vehicles sold in India went down by 15.22 per cent to 67,030 units in July 2019, while 10,804 vans were sold last month, down 45.68 per cent from the corresponding month of 2018.
 
Overall, passenger vehicle sales declined 30.98 per cent in July to 200,790 units from 290,931 units. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    NIRANJAN SARKAR

    4 months ago

    I really don't understand. If I go to showrooms and ask to book the latest SUV/MSUV models, I'm told booking is halted due to overbooking. When we read car sales report we are told that sales are down. Does it mean, people are booking like crazy and then canceling? Hard to believe.

    tapan sur

    4 months ago

    This is exactly what I predicted on that fateful day at 12:01 am, that there will be a teratogenic effect on the economy, no one wanted to believe, but now I have been proved, we are in for more shocks. The only way out is to accept that there is a problem & then look for a solution, or be doomed!

    Nanda Patel

    4 months ago

    Similar accusation were done by "Subramanian Swamy".

    https://www.moneylife.in/article/subramanian-swamy-accuses-indiabulls-of-1-lakh-crore-fraud-indiabulls-denies/57783.html

    Slowdown Effect: Auto sector workers' seek govt intervention
    Faced with the nightmarish prospect of job losses, auto sector employees have sought government's intervention through relief measures for the industry dented by truncating demand.
     
    The employees cited that till now job losses have mainly occurred on the part manufacturers' side, however, if the current market conditions prevail then downsizing might become a reality even in the OEMs.
     
    At present, the automobile industry has been impacted the hardest by a consumption slowdown which is a culmination of several factors like high GST rates, farm distress, stagnant wages and liquidity constraints.
     
    Besides, inventory pile-up at the dealership level and stock management of unsold BS-IV vehicles have become a problem for the sector.
     
    Accordingly, the industry's production levels have also receded as demand plunged, eventually leading to job losses.
     
    Industry insiders at the auto cluster of Gurugram-Manesar, home to automobile majors such as Maruti Suzuki, Hero MotoCorp and Honda Motocycle & Scooter India, say that around 50,000 to 1 lakh temporary employees across the entire value-chain, including those from ancillary industries, logistics and raw material suppliers, have been sent on unpaid leave or sacked.
     
    However, no authentic data is currently available on the extent of job losses, as most of these have occurred on the auto part suppliers' side.
     
    "The industry is struggling to survive. It requires oxygen in the form of relief measures like lower GST taxes and better road networks," Kuldeep Janghu, General Secretary of Maruti Udyog Kamgar Union, told IANS in Gurugram.
     
    "The auto industry is completely run by private sector and these companies will not be able to sustain or require the current levels of manpower, as production will fall on the back of declining demand." 
     
    According to Satish Kumar, an employee with a tier-I parts manufacturer to an automobile major, stable policies are required, as the ever changing physical specification of parts due to newer norms has led some vendors to shut-shop.
     
    "These changes based on newer norms have been taken from developed countries and require heavy investments even on the side of small parts manufacturers. Many vendors had to simply shut shop because they did not have access to those kind of resources," Kumar said.
     
    "It seems that customers have also postponed purchases and are waiting for the change in technology from BS IV to BS VI."
     
    In addition, the employees have asked the government to create an environment for easier access to finance that might prop-up sales.
     
    "The collapse of NBFCs is a major factor for the sales downturn as these companies used to provide bulk of automobile financing," Rajesh Shukla, General Secretary of Hero MotoCorp Workers Union, told IANS.
     
    "The government should look into the issue and create an environment where access to cheap finance is available." 
     
    Last week, automobile sector's representatives met Finance Minister Nirmala Sitharaman to apprise her of the grim situation.
     
    Recently, all major OEMs consisting of passenger, commercial, two and three wheeler manufacturers have reported a massive decline in domestic sales.
     
    Figures from the Society of Indian Automobile Manufacturers (SIAM) showed that domestic passenger car sales in June went down by 24.07 per cent to 139,628 units. The July figures are awaited.
     
    Consequently, sales slowdown led to curtailment of manufacturing with the domestic passenger cars' production coming down by 22.26 per cent to 169,594 units in June.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Kochar Bipin

    4 months ago

    Government should immediately announce a 6% GST reduction on BS VI vehicles. Further, it should remove all restrictions on auto exports - this will enable Maruti, which has the highest royalty payout to access latest technology, to leverage Suzuki's global network to exports around 50000 cars a month.

    Finally, RBI needs to refinance NBFCs and HFCs to expand loan books

    Charan Rawat

    4 months ago

    I am not able to fathom the reasons why the auto sales have plummeted since 10/2018.

    Is it that the sales were primarily driven due to easy money available through NBFCs. And post ILFS / DHFL fiasco, easy money is no longer available to these NBFCs , thereby affecting the sales. And banks are not an easy source of personal credit.

    But was it not incumbent on the auto makers to see how the sales are taking place and what is the cause ? Who would not binge if easy money is available.

    Saudi Aramco to Buy 20% Stake in RIL's Oil and Chemicals Business
    Saudi Aramco or the Saudi Arabian Oil Co will buy 20% stake in Reliance Industries Ltd (RIL)'s oil-to-chemical business comprising refining, petrochemicals and fuels marketing businesses of RIL, based on an enterprise value of $75 billion, says RIL chairman Mukesh Ambani.
     
    Speaking with shareholders during RIL's 42nd annual general meeting (AGM), Mr Ambani said, "I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our oil-to-chemicals division. We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment. Saudi Aramco's interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India." 
     
    Saudi Aramco and RIL have a long-standing crude oil supply relationship of over 25 years. Saudi Aramco is the world's largest and lowest cost-per-barrel producer of crude oil, is geographically close to India, and offers a wide range of crude supply options. To date it has supplied around two billion barrels of crude oil for processing at RIL's refinery at Jamnagar. 
     
    The proposed investment would result in Saudi Aramco supplying 5 lakh barrels per day (BPD) of Arabian crude oil to the Jamnagar refinery on a long term basis.
     
    RIL has also decided to restrict its mega Jamnagar refinery complex to only produce jet fuel and petrochemicals as it gets future ready with an oil-to-chemical strategy that would focus on value-added products by discontinuing all fuels the company produces.
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    COMMENTS

    Saurabh Khanna

    4 months ago

    How can he hold such a price sensitive information to announce at AGM. I'm sure the agreement must have not signed a day before or on day of AGM. Holding of prospective business with JV partners is price sensitive info. has to be announced immediately. Clear violation of PIT regulations. Being big fish, regulators are sleeping..

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