Auto in Doldrums
Updated: Apr 6, 2022
Troubles have been knocking at the doorsteps of Indian carmakers for the past few months with an unprecedented slow down in car sales . The carmakers have seen a huge dip in their sales which have been swindling for the past 11 months. Though with the festive season round the corner, the automakers are hoping to revive their fallen fortunes during these auspicious times.
This has left people with doubts about the future of the industry, rendering thousands jobless and many more insecure. The side effects of this slump are being felt everywhere. With the plummeting annual sales, the economy took a hit as the automotive industry is an important sector for our economy. Also with people losing jobs due to this slowdown and falling consumer demands things haven’t been looking great for some time now.
The largest car maker in India Maruti Suzuki saw a 33% drop in sales in August, year on year with the same being the case for other manufactures like Toyota Kirloskar , Hyundai. Carmakers have orchestrated a slew of new car launches and updates , offered huge discounts all in a bid to see fortunes reviving but these efforts have reaped no results with Hyundai being a prime example . The carmaker saw the launch of some 11 new and upgraded cars since Autumn ’18, but despite all this and many discounts the carmaker offered, only negative sales have been registered.
This downfall has had a negative impact on the retail and manufacturing part of automotive sector too. This slump has seen many car dealerships and showrooms being shutdown due to poor sales and carmakers have slowed production of cars and have ceased operation in many factories . These closures have left thousands jobless and made many insecure.
The slowdown in sales can largely be contributed to stemming in consumer demand. Demand took a hit in other sectors like consumer goods , real estate etc. too with people thinking twice before buying necessary commodities like shampoos too. All this is happening due to an instability in purchasing power of people and with people being increasingly ok in waiting to buy a product. Also with the banking sector facing serious cash crunch with an exposure to bad loans people don’t have the spending power and rising oil prices are making things worse.
Despite these troubled waters ,Kia and MG Motors- new into the Indian market , found traction with the Indian consumer . They raked in some impressive sales despite the murky waters the sectors been floating in .Their story of success to some measure brought much needed positivity in this tale of agitation and stress. They are sure off to a great start !
What lays in the future for the automotive sector is something we will know in due course of time only. The festive season is going to put things into perspective and show what the future for the beleaguered automotive sector looks like. Fear , Job Insecurity will continue to loom until we register positive sale numbers which could give the automotive industry a much needed boost.