As per the data released by the Society of Indian Automobile Manufacturers (SIAM), the sales of domestic passenger vehicles has fallen down by 30.9% in the month of July.
This is the 9th straight decline in monthly sales.
The domestic production of all passenger vehicles has also fallen by nearly 17% in the same month.
What has happened?
- The automobile sector is reeling under high stress due to the combination of market factors like weak demand, lack of credit and fluid cash with the people.?
- Vehicle sales have fallen on a continuous basis since the previous 9 months and this has triggered a massive job crisis in the domestic market.?
Why are vehicle sales falling?
- Experts have attributed the weak demand of vehicles to the lack of purchasing power of people which is itself the result of rural distress which has been persisting for a long time.
- The rural distress is ongoing primarily because there is a stagnation in the rural wages as the fall in crop prices has meant that the farmers have been unable to recoup even the most fundamental cost of their production.
- External arbitrary factors like the Demonetization and the imposition of the GST have also increased the burden on the common people and now people are either postponing the purchase of their vehicle or opting for a second-hand vehicle instead.
When will the situation change?
The market experts assess that the situations are expected to change by October when the festival season will prep up demand and the manufacturers will also likely announce major discounts for the people.