India Car Sales Plunge To Record Lows, Threatening Entire Industry
Apart from China, India was once one of the fastest-growing markets for automobiles in the world. However, that booming industry is now in peril as car sales in the country have reportedly plunged to its lowest levels, threatening the industry as a whole.
According to data released by the Society of Indian Automobile Manufacturers (SIAM) on Tuesday, overall car sales in the country for the month of July have apparently dropped by 31 percent. The figure marks the ninth straight month of decline and July experience the largest one-month drop in more than 18 years.
Major Indian players such as Maruti Suzuki, Mahindra, and Tata Motors have all experienced massive drops in sales. Maruti Suzuki, the largest player in India owning almost half of the market share, saw its sales drop by 36.7 percent in July. Tata Motors reported a drop of over 31 percent for the same month. Meanwhile, Mahindra, one of the country's leading electric vehicle manufacturers, reported a drop in sales of around 17 percent.
Global players that have established their presence in India had also experienced a sharp decline in sales. Hyundai, currently the second-largest player in the country, saw its sales fall by 10 percent in July. Japan's Toyota also reported a drop in sales of around 24 percent during the same month.
SIAM's director-general, Vishnu Mathur, mentioned in an interview that the drop was very concerning as it has had a very deep impact on every segment in the country's automotive industry. The recent slump in car sales has caused a number of automotive manufacturers to significantly decrease their production capacities. This has resulted in the loss of over 330,000 jobs within the industry, mainly due to factory and car dealership closures throughout the country.
A few decades ago, India was expected to become one of the world's largest automotive markets. International players were all scramming to get a piece of the pie, investing billions of dollars into the country's budding industry. Companies such as Hyundai, Kia, and China's SAIC all attempted to make their mark on the country via substantial investments.
Prior to the slump, India was expected to overtake Japan and Germany to become the world's third-largest car market by 2020, right behind China and the United States. However, with struggling sales, that scenario is likely not going to happen. The slump itself has been partly blamed on increased safety and emission regulations, which have driven up prices. Issues with the country's consumer finance providers and a broader economic slowdown have resulted in less consumer spending.