[Sebring]

Frankly, I think the Government has messed it up sending confusing signals. Is diesel in or out? Is petrol favoured or not? Everybody buys a car with a 10 year perspective. Also, Almost everyone in my circle wants to go electric. While Ather is fully booked till 2019 end, a dependable Electric car like the Nissan Leaf (I'm saying Leaf as I've experienced this small city roundabout), seems far far away. Consumers are waiting and watching. Another point is that it's no longer a joy to commute on our broken roads. Things are going from bad to worse if you take Bangalore. Even Ola and Uber usage are stagnant. Looks like we are frozen in time.

[GTO]

Growth levels are most definitely slowing down. To be sure, the Indian car market is HUGE in itself. Not like it's going to shrink, but the growth levels are going to come down.

IMHO, in the short-term, we are already past the peak. There are too many things working against car sales right now = BSVI is going to make them more expensive, ditto with the mandatory crash tests + airbags + ABS, Uber & Ola replacing car ownership, slowing demand from Uber & Ola drivers, self-drive car options like Zoom & Myles, horrendous traffic in urban India and parking issues in urban India.

Worse still, millennials are lesser interested in cars than any of their preceding generations. My own brother just kicked his new car purchase down the road by 2 - 3 years. Reason = he has better things to spend the big money on. Millennials prefer experiences + technology + lifestyle to car ownership. For every one time that my brother drives, he takes an Uber 10 times. And this, despite growing up in a household where his father & brother are crazy about cars, and he sees a new test-drive car every other week in the driveway.

Related thread 1 (The Cheapest Generation - Why Millennials aren’t buying cars or houses) and 2 (Change in car ownership trends in India - Paradigm shift among the urban youth)

[adimicra]

This is bound to happen sooner than later.
Just speaking about myself, I bought a Honda Jazz in 2010 and at that time, I actually stretched my budget to get the best car I could. At that time, I thought when my salary reaches X or Y times the entry level BMW/Merc, I will go ahead and buy one. I was keeping a close watch on entry level SUVs from Audi/BMW/Volvo. And now after 8 years, I have totally lost the appetite to splurge on these cars even though I can afford one. The main reason being the driving experience in the cities is so terrible that I just want to get the job done somehow, I don't enjoy driving every day any more. Yes, once in a while, when you go out for a long drive on a nice road with good weather, it's still enjoyable but that's a pretty rare occasion for me.
I feel it's better to use the money to go on foreign vacations, visit and experience things which we are passionate about and probably save for kid's education and retirement. So, I will probably be using my Jazz for few more years as it is in absolutely fine condition with no issues whatsoever.

[Thermodynamics]

Originally Posted by Thermodynamics

Looks like something happened around 2011/2012 there is a sharp change in slope.

Originally Posted by GTO

Uber & Ola replacing car ownership, slowing demand from Uber & Ola drivers, self-drive car options like Zoom & Myles

Seems true, Ola started around 2010/2011, Uber, Zoomcar around 2013, syncs well with the marked drop in growth rate.

[shipnil]

Originally Posted by adimicra

Just speaking about myself, I bought a Honda Jazz in 2010 and at that time, I actually stretched my budget to get the best car I could. ...
So, I will probably be using my Jazz for few more years as it is in absolutely fine condition with no issues whatsoever.

Exactly my thoughts. When I bought my current car in 2011, I thought I'd keep this for 5 years and then change to something new. But with all the changes in traffic I lost the appetite for driving. Add to that the constantly increasing fuel prices increase the ownership costs so I don't see a point in spending few big ones on a new purchase.

I did test drive few cars during last 3, 4 months but did not see any compelling reason to buy one of them and get rid of the current car. So like you, I am going to stick with the current one for few more years.

[theredliner]

Another factor that has put me and many of my friends and colleagues off is the ever increasing prices. The manufacturers increase prices at every single opportunity - falling rupee, increasing fuel prices, logistics, steel and what not (Just yesterday, I saw an announcement from BMW that the prices would be climbing by upto 4% from January). I have never seen them bringing the prices down when rupee becomes stronger or fuel prices drop etc. With this disproportionate increase over the last few years, cars have totally lost that value factor. I mean, even a Swift crosses 10L OTR in some variants here. While the first timers will still go and buy, most who already have one will keep it for longer due to the ridiculous asking prices and the lack of value for the money paid.

[Hayek]

I would not be so negative. Obviously, with stock markets correcting and the recent NBFC crisis which makes funding tougher, car sales will slow in the near term. The Über / Ola phenomenon also makes car utilisation improve and hence reduces demand for cars to an extent. But the growth of that phenomenon is past its prime (look at the recent strikes), and in my view, car sales will start rising again. Congestion is a problem - but not something that can be avoided in cities even if you use buses or cabs. Will the buildout of metro lines make a difference - at the margin perhaps, but I don’t see too many car users moving to the metro - it would impact bike sales much more in my view.

[GTO]

FADA drops the following email:

The Federation of Automobile Dealers Associations (FADA) voiced its concern over the dampened festive season and the de-growth which the automobile industry is currently facing.

- Unexpected de-growth during festival erases strong growth achieved till September

- Positive sales growth at FY end still a possibility, as consumer interest intact.

- Postponement of purchase by Consumers and the resultant Inventory increase a big concern for Auto Dealers

New Delhi, 23rd November 2018: The Federation of Automobile Dealers Associations (F A D A) voiced its concern over the dampened festive season and the de-growth which the automobile industry is currently staring at.

Commenting on the Navratri and Diwali festival sales, F A D A President, Mr. Ashish Harsharaj Kale said, “We have not seen such a dull festive season, in the past few years as many negative factors came into play during this season which weakened the consumer sentiment and postponed their purchase decision. It is a matter of deep concern for our dealership community.

Higher de-growth was seen in the Navratri and Dussehra festivals, especially in two wheeler and passenger vehicles. With fuel prices starting their downward trend in October end, Diwali season saw a sales uptick, especially in two wheeler but overall, we have seen unusual de-growth during the combined festive period, both in two wheeler and Passenger Vehicle. Dealer inventory levels in both these segments have risen substantially as a result of this and is a matter of great concern.

Commercial vehicle sales which have been growing at a very good rate, still remained positive in their sales growth, but some demand softening could be seen in CV’s too as the growth percentage has come down during this period.

The ongoing NBFC Liquidity issue also is a concern for all the segments and especially for the two wheeler and commercial vehicle segment where we are seeing a cautious approach from the NBFC’s during and post Diwali season.

F A D A hopes that with the recent liquidity measures taken by the RBI and the Government, Auto NBFC’s and Banks would be better placed to continue their strong support to auto retails, which contributed majorly for the industry to grow at a healthy rate from April-Sept.

We request the Government and the RBI for further ease of liquidity for Auto NBFC’s, as they are one of the key growth drivers in Auto Retail and are also operating in a less riskier business environment than Infra and Housing NBFC’s due to the short repayment cycle of Auto Loans and the Mobility of the assets.”

Concluding on a Positive note F A D A President said, “We remain hopeful of recovery as overall inquiries during the festive period were robust, and postponement of Purchase was the main reason for muted sales. With positive policy measures, the possibility of consumer sentiment turning positive is quite strong as the agriculture produce is now coming to the markets, fuel prices are coming down substantially and infrastructure growth is still going strong as well as positive liquidity measures are being taken.

The auto retail industry can still deliver positive growth in the remaining 5 months of this FY and contribute substantially to the overall growth vision of our Government as consumer interest is still visible and strong and F A D A and its members will work strongly to achieve that”

F A D A is releasing the sales trends for the first time and these trends are based on vehicle registration figures from Navratri to 15 days post Dhanteras as there is a time lag of 10-12 days between delivery and registration. The sales numbers have been collated from its members and other sources and the chart below depicts vehicle registration trends during the festive season and covers almost 80% of the various regions of our country.

Going forward F A D A will be releasing these trends regularly and from April would be doing so region wise.

Our study shows that during the 42 days festive period and on YoY basis, total vehicle registrations fell by 11%, Two- Wheelers fell by 13% and Passenger Vehicles fell by 14%. 3 Wheelers and Commercial Vehicles held some ground and grew by 10% and 16%.

For the Current Financial Year up to 20th November’18 and on YoY basis, Total Vehicle Registrations has grown around 6%, 2Wheelers by 5%, 3Wheelers by 53% and Commercial Vehicles by 30%. Passenger Vehicles over the same period has de-grown by more than 1%.

The Inventory levels before the festivals began, were at around 60 days and 50 days for 2Wheelers and Passenger Vehicles. The same merely came down to around 50- and 45-days post Festivities and still remain higher than normal.

A Chart with Year on Year comparisons can be found as Annexure 1.

[Mortis]

I'm in the same boat as several car buyers. I was planning on replacing my 2011 Beat this year or next but now I've put it off until 2020 so that I get bs6 car, preferably a hybrid. News of a hybrid Nexon launching in 2020 also helped. Hopefully it will come with some for of auto gearbox. The X451 hatch is also a contender.

I'm also planning on picking up a scooter next month a stop gap to use for commuting

[chinkara]

Originally Posted by GTO

FADA drops the following email:

The problem is using short period stats when disruptions happen.

When we compare festive 2017 with 2018 we should also keep in mind that after demonetization and GST, Festive 2017 saw an uptick in demand where a lot of pent up demand was activated. Thus it can be reasonably argued that the numbers are as much due to high baseline effect as damp 2018.

[shankar.balan]

Originally Posted by adimicra

This is bound to happen sooner than later.
Just speaking about myself, I bought a Honda Jazz in 2010 and at that time, I actually stretched my budget to get the best car I could. At that time, I thought when my salary reaches X or Y times the entry level BMW/Merc, I will go ahead and buy one. I was keeping a close watch on entry level SUVs from Audi/BMW/Volvo. And now after 8 years, I have totally lost the appetite to splurge on these cars even though I can afford one. The main reason being the driving experience in the cities is so terrible that I just want to get the job done somehow, I don't enjoy driving every day any more. Yes, once in a while, when you go out for a long drive on a nice road with good weather, it's still enjoyable but that's a pretty rare occasion for me.
I feel it's better to use the money to go on foreign vacations, visit and experience things which we are passionate about and probably save for kid's education and retirement. So, I will probably be using my Jazz for few more years as it is in absolutely fine condition with no issues whatsoever.

Sir
Absolutely my thoughts bang on. Might as well go abroad for a holiday break, rent a nice car, experience politeness, nice roads, and all the rest of it for a week by paying the price of perhaps one EMI on a luxury car in India.
Oh my heavens - a Merc or a Beemer in India 7-8 years ago could have been bought at an EMI of some 25000-35000. Today we’re talking about EMI’s of around 50,000 - 75000. And Chains and Penury and Debt for the next 5 years...Bah! By Gad! Forget it!

[thehighwayman]

The advent of ride sharing services has indeed been one of the main reasons behind a slowdown in car sales in developed countries. Not sure how much of a factor it was in India. If our public transportation infrastructure was better, the slump perhaps would have been even higher.

[landcruiser123]

I think 3 major factors are contributing to this:
1. Bad traffic discipline coupled with poor infrastructure:
This is a given, considering how cities are built without planning and licenses are freely given out. No metro city in the world is without traffic woes, but India's problem of not having enough infrastructure and terrible driving discipline complicates the problem. Also, add parking woes to the infrastructural problems.

2. Uber/Ola at competitive prices:
These services have certainly redefined shared mobility. They are here to stay, but I'm guessing the price wars are going to end. The cabs may start getting more expensive in the next 3-5 years.

3. Governmental regulations:
Our regulatory agencies come up with absurd laws every second day. They just seem to ban 10-year-old cars in cities overnight according to their whims and fancies.
Pollution is a concern, but automobiles aren't a major cause. Further, automobile pollution can be reduced by strict emission checks. I agree that BEVs are the way to go and they should start building infrastructure to support BEVs in at least 5-6 urban cities.

Cars are still a cash-cow for the government and I think we'll see this trend reversing. Most Indian cities are still far away from the point where one can ditch his car for a metro/bus.

[Hayek]

Originally Posted by GTO

FADA drops the following email:

Extraordinarily self serving - though that is the raison d’etre for such organisations. The entire idea that banks should lend to NBFCs which are not capable of borrowing on market terms, so they can lend to borrowers who are poor credit risks, to buy cars and two wheelers they don’t need boggles the mind. It’s this sort of behaviour that has caused our banking system to be disfunctional. The auto industry and auto dealers would be better off letting the market find its own level, downsizing operations to that level and then resuming growth - instead of relying on “stimulus” which would extend the cycle of artificial demand and lack of genuine growth.

[dark.knight]

The truth is quite easily out there once you look beyond this forum - car buying interests are waning. Though overall, there may be more cars than ever before.. a large portion of the potential customers who have the resources and space to keep a car, aren't biting the bait.

Reason 1 - Car prices have galloped ahead in full steam in 5 years. Five years ago one could aspire for a luxury automobile brand new.. today with the 3 Series, A4, Q3 etc touching 50's.. it sure isn't easy. Also hatchbacks today cost 10+ lacs and entry sedans are 5-6 lacs more. In most cases these are annual incomes if not much more than that. EMI's hurt even more.

Reason 2 - Rentals for housing is going up in metro cities.. people do not wish to settle down in other states so they also similarly don't wish to own a car where parking becomes an additional burden and to add to it maintenance, repairs and cleaning. UBER and OLA have made cars accessible like never before, basic, el-cheapo cars but most people don't know the difference anyway.

Reason 3 - In general today, transport has become more of a procedure or formality than a ceremony. When I was a kid, each time the car got used, it was a ceremony, a way to travel by our own means and with family. Today there either are no cars in a household or multiple cars.. the importance and joys of ownership are tapering down the hill.

For one, I'm happy that the demand is going down and I hope it continues.. I love cars but I don't love the manufacturers and to be very frank, more people owning cars means more struggle on the road. To me a car is an extension of myself.. one of a few things a born and raised middle-class guy can indulge in, to feel special and escape the elements like rain and sun. The car industry has no sentimental value to me, though. They've only created more harm than good.