India’s auto industry will have to continue its wait for the expected resurgence after a long summer of extreme weather, prolonged election period and price rises which saw sales getting stagnant.
With elections over, a pro-business budget and a strong monsoon performance, sales were expected to pick-up. But as it turns out, it’s a mixed picture.
Auto sector’s poster boy, the passenger car, continues its decline, as customers continue their switch towards SUVs and other utility models. In fact, it is not just passenger cars, both hatchbacks and sedans, that have dropped in sales, but even commercial vehicles like goods carriers, and surprise surprise, even e-rickshaws which were doing well till recently, have shown a de-growth.
Passenger vehicles fell as much as 2.5 per cent vis-a-vis equivalent month of last year, posting just 3.41 lakh units last month compared to over 3.50 lakh in July 2023. Sale of good carriers fell nearly 6% while e-rickshaws fell about 18 per cent.
While two-wheelers maintained a growth, it was pushed primarily by scooter sales, which grew almost 30 per cent, while motorbikes grew just about 4 per cent.
The industry is now pinning all its hopes on the mid-to-long term, hoping the good monsoons will give dividends sooner rather than later. Society of Indian Automobile Manufacturers (SIAM) President Vinod Aggarwal said, “The above average rainfall coupled with upcoming festive season is likely to again propel growth in the short term. In addition, enabling budget announcements which emphasises on overall economic growth with fiscal support for infrastructure and rural sector should augur well for the Auto sector in the medium term.”
