[trkauditya]

The slowdown is real and long term and not due to transient issues like the shift to BS 6 or the lack of clear policy regarding the diesel powered vehicles. The automobile firms have been trying hard to downplay the slowdown and allay the fears for their own reasons. The EVs, which they have been projecting as the solution for all ills, may only grab a larger pie in the existing market and may not really increase the size of the market.

Two factors which helped the increase in sales in the last decade i.e. the pride of ownership and a need for comfortable mode of travel are losing relevance more rapidly than ever. Improvement in air connectivity to Tier-2 and Tier-3 cities has forced people like me to think twice about taking my car out for that trip to my home town. Introduction of new trains run by private firms can only add to the woes of the automobile industry.

The proportion of people who buy a car just because they love one is always minuscule anyway.

[windrider]

I wont be buying a car anytime soon since
-- 90% of chores can be done on two wheeler
-- rising cost of fuel
-- driving through city traffic at peak hours does
nothing else other than increase my blood
pressure. I end up reaching home or office in a
p*ssed off state and sometimes end up taking
that pent up anger on my poor wife or office
colleagues. I can squeeze through traffic using
my bike and reach my destination 30-40 mins
quicker and my stress levels are low.
-- manufacturers are selling us cars that just have
minor upgrades but cost 15-20% more than the
previous version. So I'd rather stick with my
older vehicle or get a used vehicle from a
higher segment for the same price.
-- very limited parking spaces.
-- Uber, ola ,zoomcar can take care of most of my
travel needs whenever the whole family needs
to go somewhere. That's maybe just once or
twice a week.
-- salary has gone down, while cost of living has
gone up. When I started my job as an
engineeringg fresher, i was earning about
20k+allowances. That was in 2008. Now as
a fresher in 2019 you will be lucky to find a
company that offers more than 15-20k to a
fresher.

Keeping all of this in mind , it makes no sense to get a new car. What are you getting? Slightly improved safety, a better infotainment system, and a new design. And sometimes the new design ends up being worse than the outgoing model. You are better off investing your hard earned money on something else other than something that starts depreciating the moment they hand over the keys to you.

[nasa_hubble]

One more thing that comes to mind apart from the various valid reasons discussed above, specifically w.r.t the Indian market is that the bulk of sales come from the sub 10-12 lakh price range.

This price point is dominated by cars falling under the sub 4 metre rule and this rule deters manufacturers from building cars longer than 4 mtr. Same applies for the engines, 1.2 ltr. petrol and 1.5 ltr. diesel.

Hatchbacks, Subcompact Sedans, Subcompact Crossovers, Compact MPVs, Compact SUVs, all are providing more or less the same real estate at different price points with very little to differentiate.

Earlier the Suzuki Esteem, even the 1st Gen. Dzire was longer than 4 mtrs. It meant that providing more real estate was also one way to add value and differentiate your product at a reasonable cost increase. Giving better engine options was another way to differentiate.

Moreover cars longer than 4 mtrs. are taxed higher. This results in a double whammy for the consumer looking for a segment upgrade.

Hence, i believe a lot of people are holding their purchase for better cars or saving to upgrade to segments more in sync with their aspirations.

I believe the demand for cars is present (ask KIA & MG). What is absent is the correct supply of cars at correct price points for the customers.

[DevendraG]

I bought my first car (iGen i20) in 2012 & sold it after 3.5 years only to fund the shortfall in my down payment towards my home.

I purchased my second car (Ford Ecosport) in 2018 & again my main purpose was in-city travels and occasional vacation trips.

When I introspect, I don't see any purpose that could not be met by my i20 had I retained it.

Point being, the value proposition that the B1/B2 segments provide are almost comparable to a segment above and hence most logical decision would be to extract it's fullest considering most of them have been bought via loans. And once you take a loan (service person who can't get depreciation benefits), you'd avoid loans as far as possible.

Not to mention the pathetic road conditions, horrific traffic sense & almost nil traffic management.

I almost avoid all weekends, public holidays & peak hours to go to malls, for vacations just to spare myself of traffic & parking woes. And if inevitable, Ola/Uber are always at my disposal.

[laser2707]

It's a reflection of changing times. A car represented many things - status, independence, pride once upon a time. Today with the high cost (purchase + ownership), traffic woes, parking problems, etc. car ownership is often a headache.

So a lot of potential car buyers are foregoing car ownership and opting for options that offer freedom from the hassles of car ownership. Automobiles will still find a place as transport but individual ownership will decline. They will form a part of a larger eco-system of mobility solutions that's all.

[ringoism]

Originally Posted by i_see

Cars are going out of reach for the masses and definitely people are hanging on to their cars longer and buying less new cars. This is definitely one of the causes for the drop in sales
While we are on the topic, saw this video few days ago. The problem is global. Even in US of A, where cars are an essential part of life, the story is same....

Some decades ago, one could custom-order an American car by going down a long list of literally dozens of mechanical / trim / convenience options and choosing / paying for those (and only those) most personally important / suitable to one's tastes / uses / budget. You could in those days purchase a full-sized family car with anything from an anemic six-cylinder to a 6-7.5L fire-breather. Either could be had with or without crank windows, air conditioning, in some cases even a radio (the famous "radio delete" option for future track cars or people who planned to install an aftermarket unit of their choice). You could order a limited-slip differential with any number of choices for final drive ratio. There were soft-top, sunroof, T-Top options, automatic dippers, headlamp-off delays (so you could find your way in a dark street after parking), sport suspensions, air-ride suspensions, towing packages, swivel bucket seats, option to have the gear-lever on the column or center-console, etc, etc.- even airbags were there as early as the mid-70's, and it didn't make much difference that very few people ordered them, with all this variability, somehow these were the "golden years" of profitability and consumer engagement for these companies.

Meaning that a middle income family with five kids could afford a basic, roomy, safe car to take them places, a farmer could buy a simple 4x4 crew-cab pickup or Jeep, etc. Those with deeper pockets could really get one done up fancy/fast, and all those in-between could pick and choose what they could afford to splurge on or else manage without. In large measure, the myriad options applied to compacts, midsize, and commercial vehicles as well.

All this was before the IT revolution and days of near-complete automation and digitally-controlled super-factories, and it occurs to me that today it should actually be easier than ever to give an average-income buyer what he actually wants/needs rather than forcing him with his family into ridiculous compacts or long-term debt. But the manufacturer's response there was telling: "Interest rates are low". The U.S. has represented a debt-culture and desire to "keep up with the Jones's" for a long time, but I have to wonder: "Millenials" basically represent (there) a class of spoiled brats who were never told "no" by anyone... Fine... You want it, you can't afford it, easy solution: the eight-years of monthly car payments, and if it makes big corporations (and/or their execs) richer, then all the better.

Had an American friend over a couple years ago, a rather affluent owner of an engineering company, aircraft technician, and father of two small kids in his mid-late 30's; He was driving around here in a very spartan Bolero LX 4x4 with no comfort/convenience options but power steering. His comment? "I wish I could buy something like this in the U.S. - something simple, solid, practical, economical". He is not the only one who has expressed this kind of thing to me.

But the powers-that-be aren't going to let THAT happen. And people, within limits, both here and there, are going to keep on spending money they don't have... Though some level-headed options have been coming to light as of late...

But lest we feel the trouble is restricted to our own age, an old expression of frustration towards "Mr. Ford" and the loan-mongers of a former time:

https://youtu.be/4jOMcAlO7rQ

-Eric

[landcruiser123]

Hardly surprising considering that the world is waiting for EVs to take over. There hasn't been a significant development in IC engine technology about 10 years. We may see a boom in sales in 5 years when more EVs hit the streets.

The rate of growth won't be excessive considering the amount of money millennials have, which is not much.

Originally Posted by GTO

This shows that a lot of the macro-level problems aren't specific to India. Worldwide:

- Cars have gotten too expensive.

True that, and not India specific. Just read an article recently that cars are so expensive in the US that some middle class families can't afford new ones.

[Sasanka_Sanga]

In India, we see a steep decline in car sales because of

1. Strict loan approval process and greater inclination towards CIBIL scores
2. Absolutely no clarity on BS6 vehicles which is keeping customers perplexed to buying decisions
3. Diesel engines are a gamble factor post BS6 norms, so people are keeping their love towards their old diesel cars are refusing to upgrade.
4. Waiting for discounts on BS4 cars as we get closer to BS6 era
5. Growing city traffic and people's inclination towards public commutes like metro's, Ola and Uber's
6. Car pooling is becoming popular and instead of buying new cars, people are investing in fuel and enjoying privileges in someone else's car.