According to the Society of Indian Automobile Manufacturers (SIAM) report, sales of passenger vehicles plunged to 23.7 percent in September. The month of September also marked the 11th straight month of decline in automobile sales. If sales do not rise soon, a lot of job cuts are expected to follow in the industry, states the reports.
The Society of Indian Automobile Manufacturers (SIAM) data showed sales of passenger vehicles dropping down further to 2,23,317 units in September from 2,92,660 a year ago. The passenger car sales dropped to 33.14 percent to 131,281 units.
The SIAM data comes at a time when the automobile industry continues to face a crippling slowdown in demand. The decrease in demand has also reduced the production output and has also resulted in many job cuts in the industry, as per reports.
Various automobile industries have halted some production and have also cut down a lot of jobs, state reports. The industry continues to grapple with various challenges while a broad economic slowdown continues. To deal with the economic slowdown, the government has announced a corporate tax rate cut to boost the manufacturing process and lift the tumbling growth.
Aggregate revenue for listed automobile companies is estimated to have dropped by one-fourth in July-September, CRISIL, the Indian arm of S&P rating agency, said in a note on Thursday. The drop in auto sales is also expected to hit earnings for insurance companies such as New India Assurance and ICICI Lombard General Insurance in the September quarter, state reports. Last month, car companies such as Maruti Suzuki India Ltd have lowered prices on some models, responding to the government's move to cut corporate taxes in a bid to revive economic growth.
Leaders from the Indian auto industry had asked the government for a stimulus package, including GST reduction on vehicles. Currently, the sector which has been hit by an unprecedented slump in sales. The passenger vehicles (PVs) segment has been the worst hit, with sales continuing to decline for almost a year now. As per SIAM figures, vehicle wholesale across all the categories declined by 12.35 percent to 60,85,406 units in April-June against 69,42,742 units in the same period of last year. Federation of Automobile Dealers Associations (FADA) has stated that nearly two lakh jobs have been cut in the last three months due to the slowdown.
(With inputs from international agency)