[SmartCat]

In FY18, car sales in Mumbai dropped 20%. Bangalore car sales dropped 10%. Chennai is down 5%. New Delhi is up 1% despite coming from a much lower base (diesel ban) in the previous year.

TOI article:
https://timesofindia.indiatimes.com/...w/63956575.cms

This doesn't seem to be a one year thing, because car manufacturers have much longer term data. This is what sales directors are saying -

Hyundai:

Metro cities are surely seeing challenges in volume growth on account of rising trend of shared mobility through platforms such as Ola and Uber. The other key factor is rapidly-growing metro transportation, especially to key employment hubs such as Gurgaon and Delhi. People prefer to take the metro than driving and getting stuck in jams

Honda:

growing road congestion will make it tough to increase car demand in big metros

What do you guys think? Have we reached "peak" car sales in Metros?

Personally, I feel this is just a short term trend. In the longer term, car sales in metros will continue to scale new highs because of the same old "India story" -> migration of more people into cities, cities themselves growing in size, people upgrading from two wheelers, rising per capita income of city dwellers and so on.

Traffic congestion is an issue, but better public transport and city planning is likely to ease congestion over the long term.

[Hayek]

Interesting trend. Hope this is not just an artefact of where people register cars for tax reasons. Am surprised with the sharp fall in car sales in Bombay - 20% is a lot, and while Ola / Über availability is high, the metro lines are several years away and I am surprised people are not buying cars. In fact, my own view is that the decline in fleet addition by Über and Ola, and the fall in taxi sales probably contributed to this. Bombay used to have about 40000 black and yellow cabs. While I don’t have data, there are probably as many if not more Über and Ola cabs in the city, almost all of which were added between in FY15-FY17. With Über and Ola reducing incentives, their fleet addition has probably declined. And lots of black and yellow cab owners are probably letting permits expire rather than replacing their old Premiers that need to be scrapped. So it’s quite possible that private car sales continued to rise but the fall in yellow badge car sales led to this result. Delhi is obviously an outlier due to the diesel car ban.

One article which suggests this may be the case

https://www.thehindubusinessline.com...cle9476807.ece

[omishra]

I live in Pune where it was 2% rise in car sales. Still we face accute shortage of car parking. In my society, we have only 1 car parking per house. But people are buying second car by booking another's parking lot on lease or rent. On city roads, we drive with 4" gap between vehicles on certain roads.
While on replacement of my old car, I am still on edge, to buy or not. Because my needs are fulfilled by app based cabs. So why to buy a car now! 👍

[Tanveer02]

One more point I would like to add to this list apart from the mentions of Uber, Ola and metros is the rapid growth of the used car market. Students like me primarily, we prefer the used car market more than buying a new car. If I had to go and pickup a new car for 4 lakhs, it would be a 1 litre Alto K10 or a Kwid, tops. But with the same 4L, I can get a used Fiesta 1.6 or even a pocket friendly MJD, with about 40-50k in the odo and decently maintained. A better equipped and better drive overall. Keep it for a few years till we have enough bling and a job to feed a new car.

[CrAzY dRiVeR]

Originally Posted by smartcat

What do you guys think? Have we reached "peak" car sales in Metros?

If someone decides to ban diesel cars one fine day without proper studies, they would surely start with the metros first.

That is my single biggest concern in upgrading to a better diesel at this point - and the petrols are just not too exciting / expensive to run or even both in some cases for my current usage.

Personally - I feel the time is just right for the real premium / hot hatches to enter the urban market.

[ninjatalli]

I hope this trend is to stay; and my gut feeling says it will be so. It's becoming a pain to own and drive a car around the city in any of the metros. Chennai and Hyderabad might still have some (relatively) breathing space but they are getting there.

Originally Posted by smartcat

Traffic congestion is an issue, but better public transport and city planning is likely to ease congestion over the long term.

Lol - no. Lesser cars/vehicles is only going to do that.

[procrastinator]

Buying services better than car?
When we relax being driven by someone in metro traffic yet pay less than owning a car + driver.

[IshaanIan]

I don't think it is simply a blip because I myself had moved to Bangalore for a few years from Hyderabad and being a die-hard petrol head, I found myself not wanting to drive as often as I otherwise would. Many older folks I know of have even gave up driving entirely in Bangalore. The road infrastructure and traffic is simply too hectic to deal with on a daily basis. Many younger folk are also just not interested in learning how to drive, and I have also noticed a slightly less frequent car replacement schedule amongst a few of my friend circle. This all aligns with the trend in less characterful cars and a focus towards appliance-type mass market solutions from car manufacturers.

[2000rpm]

I think this is a good trend if it continues. The car enthusiasts still have their cars, while people who dont like driving are moving to better options like ola / uber. This is a win-win. Why is this a bad thing? In Mumbai, lot of old societies have parking on the street which reduces the availability of roads to users / pedestrians.

Also as someone above said, pre-worshipped car sales are on the rise. Lot of people like to have a segment above car.

[GTO]

If the numbers are true, I'm shocked by this news piece as the market is reporting higher car sales than ever! Even though there have been reports of growth coming from outside the top cities, I surely didn't expect such a blip in their demand.

But then, we can see some reasons for this trend. Over & above what's stated by BHPians already:

• Metros have crossed peak auto sales.

• Migration into the metros is coming down due to real estate costs + congestion, and the fact that quality of life + economic development is improving in smaller cities?

• Penetration. Those who wanted to buy a car have in the last couple of years. There are many first-time car owners who have already entered the market.

• No need for a 2nd / 3rd car in the house due to Uber & Ola.

• Used cars are getting better & better. The supply of used cars in metros will always be vastly superior to B-towns as, until 5 - 6 years back, car sales outside of the big cities weren't what they are today.

• Uber & Ola give you chauffeur-driven comfort at a lower cost than your own self-driven car. On this saturday night, I faced two major traffic jams in Bandra...past midnight!!! Us enthusiasts will always end up owning & loving our cars; however, the aam junta is getting smart enough to realise that their own cars are standing in one place for 95% of the time - why not rent instead of owning instead? Not to forget, Uber & Ola's car-pooling options are ridiculously cheap. A close cousin of mine who has an Innova, i20 & Grand i10 AT in the house uses Uber Pool to commute to work everyday - cheaper than his own car, chilling instead of handling traffic and more productive (he works while commuting).

• Would be interesting to see if 2-wheeler sales have gone down in the metros. I wouldn't think so. There are many people who can afford a car, but still prefer to ride to work because it's quicker, cheaper and easier to park.

• Folks are holding onto their cars for longer? Only logical since the cars of today are better in every way. Loan durations are also increasing (7-year loans?) and most people usually hold onto their cars until the loan is paid off.

• The younger generation is more interested in spending their money on experiences & lifestyle than cars. I've heard this first-hand over & over again from those in their 20s.

• With time, I also see more & more people working from home. It's just a waste of your time to spend 2 hours a day in traffic. That could be put to much better use.

• With time, I see more & more people travelling less on a daily basis, especially during the traffic-ridden peak hours.

[libranof1987]

I have a feeling this will be a temporary blip.

Sure, Uber/Ola has been a massive disruption. Several people I know, from across demographics, shunned personal vehicles to travel in app-taxis. App-based taxis, chaotic traffic and self-drive rentals seemed like it would threaten the need of car ownership.

But, that dream is fast ending.

1) Surge pricing, lack of supply during peak cars and a general dissatisfaction among drivers themselves (leading to strikes) and lack of regulation on safety has ensured we stop well short of relying on them

2) Self-drive rentals, as they are not stringently maintained as in the west, cannot be relied on entirely

3) The safety situation means a lot of families are unwilling to let their kids (especially girls) travel alone

Car ownership is currently, and most likely in the short term, indispensable in India. In metro cities, perhaps families are reluctant to have a big garage (multiple cars to cater to specific needs) but I doubt they can do away with it.

Also, as GTO stated: numbers don't lie. You can't have an industry growing at a crazy rate, manufacturers posting ever-rising sales and yet, we seeing a drop in sales.

[SmartCat]

We should keep an eye on opening of new dealerships and closure of existing dealerships (ex-Maruti & ex-Hyundai) in our cities. That will give us some idea about trends.

[IshaanIan]

Originally Posted by smartcat

We should keep an eye on opening of new dealerships and closure of existing dealerships (ex-Maruti & ex-Hyundai) in our cities. That will give us some idea about trends.

An even more simple test would be to ask all the 18 year olds you know, if they have a driving license. You will be shocked by the numbers. Even just 6 years ago when I turned 18 and got my license, nearly all my friends were getting driving licenses as soon as they turned 18. Today it is more like 1 out of every 2 guys who turns 18 bothers to get a driving license.

[abhi7013]

Originally Posted by IshaanIan

An even more simple test would be to ask all the 18 year olds you know, if they have a driving license. You will be shocked by the numbers. Even just 6 years ago when I turned 18 and got my license, nearly all my friends were getting driving licenses as soon as they turned 18. Today it is more like 1 out of every 2 guys who turns 18 bothers to get a driving license.

When I was 18, i immediately got a licence cause i couldn't wait to get behind the wheel. For those who were not so keen, the DL was made as just another ID proof document.

But the trends have changed now. With Aadhar cards everywhere, no one needs a DL as ID proof and most of my friend's cousins and mine are not keen on getting one either. And guess what, just as you said, out of the many 18-20 year olds i know, few of them know driving but hate it and few others do not know how to drive. Only the few remaining ones drive around. Again that doesn't mean they love driving as much as the older generations do!

Like a few others mentioned, i wish this trend continues on.

[Jeroen]

Although it might go up again, I would think it is definitely a trend and it is following the same pattern as what is happening around the world.

For just about all the reasons mentioned before, fewer cars are bought. The better public transport infrastructure a metro has, that will help.

Next, young folks are simply not that interested in having their own car. They might still get a driver license, but owning a car, especially in a metro brings a lot of hassle and not much convenience. Especially if the public transportation is getting better and you don’t mind using it.

If the rest of the world is going this way it is very likely that the Indian Metro’s will follow in due course. Maybe this is the first indication that the same trends are beginning to show in India.

Jeroen