[volkman10]

Passenger vehicle sales stay in slow lane .

Sales of passenger vehicles grew at their slowest pace in five years in the just concluded fiscal year as higher insurance costs, a liquidity crunch and uncertainty ahead of the general elections hurt consumer sentiment.

The sector grew by less than 3% overall to around 3.3-3.4 million units, industry estimates suggest, despite deep discounts offered by car makers to counteract the slowdown

Link

[volkman10]

Dipping consumer sentiments, political scenario, upcoming emission norms are some reasons that pulled the auto segment to a degrowth of 17% (Y-O-Y).

Honda Cars India was the only manufacturer to registered positive growth, among the total 12 major car manufacturers, but that is due to a lower base (2018)




Link

[avishar]

My god the April numbers are terrible. This is not good at all. If general consumer sentiment and credit lines not open up, we could we looking at a sales decline next year. This coupled with political uncertainty, policies and buyers postponing purchases till new safety and emission regulations are implemented. The industry is going to suffer from record low capacity utilisation.

[avira_tk]

I don't think there's any reason to panic, election season is usually a bad time for most sales. Things will improve unless the incoming government messes things up with rhetoric. The multi phase conduct of the elections means that most work is held up due to poll campaign rules and money cannot be transported, I'm referring to MSME businesses, not vote buying.

[ValarMorghulis]

I think a large part of it is also contributed by the infrastructure. Any car, and esp. good cars, are a joy to drive on good roads. But the current infra is not growing at the same pace as that of the car sales. There was bound to be a time when the customers see the writing on the wall.

Combine that with Uber/Ola, etc. and unless one drives daily/regularly there is no point of owning a car.



As infra improves, traffic eases a bit, there will be improved sales. Just my $0.02.

[Shreyans_Jain]

Originally Posted by avira_tk

I don't think there's any reason to panic, election season is usually a bad time for most sales. Things will improve unless the incoming government messes things up with rhetoric. The multi phase conduct of the elections means that most work is held up due to poll campaign rules and money cannot be transported, I'm referring to MSME businesses, not vote buying.

There is absolutely no issue in transferring money through legal channels like online transfer, RTGS etc. It is only movement of physical cash and gold that have stopped, but these are anyway illegal, unless of course backed by proper paperwork. In general, market sentiments are low and economy is sluggish. There is just not enough work, while rentals, compliances and overhead costs increase day by day. It has become very difficult to run a stable and viable business today. And this is across so many sectors, not just automobile.

[avira_tk]

Originally Posted by Shreyans_Jain

There is absolutely no issue in transferring money through legal channels like online transfer, RTGS etc. It is only movement of physical cash and gold that have stopped, but these are anyway illegal, unless of course backed by proper paperwork. In general, market sentiments are low and economy is sluggish. There is just not enough work, while rentals, compliances and overhead costs increase day by day. It has become very difficult to run a stable and viable business today. And this is across so many sectors, not just automobile.

There is plenty of business that is still dependent on small sums of cash, especially the wholesale to retail part, electronic payments happen later in the cycle. Election checking means that in addition to risk of siphoning off of the goods, the transporter is harassed about the cash in hand. Drivers usually double up as collection agents and they usually delay collections until after the election.

It's cheaper to just sit out the season than deal with legal issues, even cab drivers sit out election season because they are forced to work without proper compensation and even that pittance is delayed. This naturally leads to sluggish demand and low money velocity.

[coldice4u]

The falling sales and the resultant chaos was bound to happen sooner or later. Driving a car in cities, and even small towns has become a headache. You are worried about parking, commute times, nicks and dents, unruly behaviour, moronic drivers, fuel economy due to the slow average speed whenever you take a car out. I have seen very small towns getiing clogged as the roads just cannot handle the humongous number of cars that are pouring onto the roads. And before someone says says about more infrastructure, no that's not the way out nor is it going to happen.

Road trips used to be a lot of fun especially to the hills, but recently even highway trips are tedious with the increasing number of cars on highways even. The less said about traffic jams encountered in smaller places during such journeys, the better. And when i come to think of it each year we are adding 3.3 odd million cars every year ! That's 34,000,000 !

The manufacturers should share a lot of the blame, they have been been showcasing absurd projected growth figure, without any regards to the actual situation on the ground or the roads! Claims like low car ownership per million/billion people etc look good on paper but dont tell even half the story. I am a hatch owner and i see no reason to get my self an upgrade. Sure it will be great to be driving in an SUV, but in many places, its not about affordability anymore. When people who can afford cars are not buying cars, you know something's not right.

[CARDEEP]

IMO Indian car market is reaching saturation, despite the car ownership numbers as compared to population being on lower side. This is also because per capita annual income of Individuals is on lower side.

Then there are other factors viz - congestion (traffic & lack of parking spaces) in few cities, legislation &/ or Govt policy, better public transport in few & otherwise in others.

In fact, 2-wheeler sales are increasing as per a report few months ago.

Plus this is election year, we all know where all money is going.

Finally, the world is going through transition phase to electric/ hybrids as fossil fuels are being demonised & will perish in couple of decades.

Laggards in technology will soon find it difficult & foreign manufacturers (read Chinese manufacturers, as China is biggest producer of lithium ion) will have upper hand in next few years.

[locusjag]

This is as far as India's city-centric development can go. Why is it that everyone has to settle in cities to find gainful employment? It is a crying shame that it is so. We're all crammed together like sardines man!

If you and I were able to live in - say - Karaikudi (a tier 3 town), and if most others were spread out similarly in other villages and towns across the country, this would be a whole another ballgame.

[batish]

Wasn't this bound to happen?

1. Average car speed in Delhi has decreased to around 26kmph. Traffic is not the same as it was 5 years before, it has grown exponentially.
   
   
2. Lack of parking space and congestion.
   
   
3. Insurance costs have increased a lot. I paid Rs. 15k for 7th year without zero depreciation or any add ons.
   
   
4. Not to forget the toll tax on National Highways. A 250 km road trip used to cost almost 300 one way till last FY.
   
   
5. Fuel prices have surged. The difference between Petrol & Diesel is too narrow. With average speeds decreasing and fuel prices increasing, it is not the same situation which was few years ago.
   
   
6. Not to mention the agony while driving on roads with two and three wheelers coming in from any direction.

[neoonwheels]

Does the taxes also play the part? One of my close friends bought a X30i top of the line in US for $45K while here we pay almost 65-70L for the same car. This is just one example, I am sure every segment has substantial amount of taxation pushing the prices further north. C segment sedan was around 10-11L 7-8 years back now has gone up to 17L. That is 50% increase

Add to this the cost of maintenance which again has gone up substantially. May be using Uber/Ola would be cheaper going ahead.