In contrast to India, China’s production up.
By Rajiv Theodore
NEW DELHI: The boom time for India’s once vibrant automobile industry is over, at least for now.
Car sales, which is seen as an important barometer for economic health, fell for a record ninth month in a row, with the latest figures from July showing a decline of 7.4 per cent dip. Commercial vehicles too took a beating for the 17th consecutive month. To add salt to the wounds there are report that workers in the sectors are getting laid off.
‘’The industry is in tough times,’’ says Sugato Sen, deputy director general of the Society of Indian Automobile Manufacturers (SIAM).
Domestic passenger car sales declined to 1, 31,163 units in July this year from 1, 41,646 units in the same month of 2012. While total sales of commercial vehicles dropped by 14.93 percent to 55,301 units from 65,008 units in the year-ago period, heavy and medium commercial vehicles (M&HCV) sales were down 19.88 percent at 18,611 units.
“It is a very serious situation for the industry. The original equipment manufacturers (OEMs) have started adjusting temporary and casual workforce,” SIAM Director General Vishnu Mathur told reporters here in New Delhi. For the total passenger vehicles, including cars, July was the 8th straight month of decline. Similarly, for motorcycles and grand total of all categories, it was the 6th straight month of decline, Mathur said.
Comparatively, India’s weak figures come as vehicle sales in China, the world’s largest car market, shifts back to higher growth. From January to July this year, China automobile production reached 10,968,706 units, an increase 12.46% compared with the same period of last year; Production of passenger cars was 9,963,300 units, increase 9.62 percent year on year; the output of commercial vehicle was 2,371,708 units, increased 12.78% compared with the same period of last year.
It was in the last decade that India’s car sales grew by a blistering 20-to-30 percent which had attracted foreign carmakers such as Ford, Renault-Nissan, GM and other firms into the country as they sought to boost sales globally.
But with slowing economy the passenger vehicle segment growth in India, the sixth-largest car market worldwide, went into a sliding mode since 2010. The middle class continue to shy away from auto showrooms.
India, Asia’s third-largest economy, is forecast to grow by five to 5.5 percent this financial year — its weakest pace in a decade.