When the Society of Indian Automobile Manufacturers (SIAM) released their annual figures for the past financial year, they said that sales in the new financial year 2019-2020 will only grow three per cent. However, with the latest data released today, the numbers made for grim reading. Sales of passenger cars declined 19.93 per cent, sales of utility vehicles were down 6.67 per cent, sales of scooters collapsed by 25.89 per cent and sales of motorcycles crashed 11.81 per cent. Miniscule growth was only shown by passenger segments of commercial vehicles, even though sales even for medium and heavy commercial goods-carrying vehicles also collapsed by 15.24 per cent.

And with these numbers only being those for dispatches rather than deliveries by dealers, with the Federation of Automotive Dealers Association (FADA) claiming a few days ago that vehicle registrations have also dropped significantly. Although registrations, which indicated a year-on-year decline of just nine per cent as against the 17.07 per cent decline in manufacturing is possibly due to manufacturers adjusting production to cope with dealers asking for lesser inventories. According to FADA whose members are demanding just a 21-day dealer inventory, the case is that several dealerships now have have vehicle inventories exceeding 45-50 days, which has led to manufacturers offering higher ‘marketing incentives’ to buyers.

However, this does not mean that the Indian automotive industry is is a tailspin, most manufacturers are keeping their India plans on track, and Chinese-manufacturer Shanghai Automotive Industrial Corporation (SAIC) is launching the erstwhile British marque MG in India this week and the country’s second-largest carmaker Hyundai launching their ‘venue’ utility vehicle next week. Hero Motocorp also unveiled their latest scooters earlier today, but the negative sentiments have the industry worried. Sales have come under pressure due to a historical ‘pre-election’ dip but also due to new insurance rules and safety norms that have driven up prices, particularly of two-wheelers. However with even the most optimistic industry marketers not expecting sales to start increasing until the festive season, the roads might be emptier for a few more months yet.