20.5% drop in May Car Sales, 18 Years Low Due to Poor Demand

Two Wheeler Sales dropped by 6.73%
Commercial Vehicle declined by 10%
Overall decline by 8.62%

Last month has been extremely dull for car manufactures. The 18-year record cracked with May 2019 Passenger Sales figures beating May 2001 sales figure that clocked 21.5% of drop. The industry managed to push just 20.5% of sales in the passenger vehicle segment. Not just four-wheelers, two-wheelers also saw a similar drop.

As per SIAM reports, car sales in India statistics were to the bear side last month. Indian passenger vehicle segment has seen the lowest slump with just 2,39,347 units of vehicles sold in May 2019. The car sales figure received 26.03% of the decline, making a lakh and 47 thousand units. Vans received drop by 27%, Utility Vehicles by 5.64% and commercial vehicle by 10%. Even the 2-wheeler segment declined by 6.73% being stagnant at 68,847 units only.

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The car sales have been on a continuous drop for last 11 months except for October 2018 when sales shot up by just 1.55%. May 2018 hs witnessed 3,01,238 units of passenger vehicle sales, higher than May 2019 PV sales figure. Have a look at the below chart for a better idea:

Segment vs Month	May 2019 Sales Decline	May 2018 Sales Decline
Domestic Cars	26.03% \| 1,47,546 Units	1,99,479 units
Motorcycle	4.89% \| 11,62,373 Units	12,22,164 Units
Two-wheeler Segment	6.73% \| 17,26,206 Units	18,50,698 Units
Commercial Vehicles	10.02% \| 68,847 Units
Vehicles (All Category)	8.62% \| 20,86,358 units	22,83,262 Units

As SIAM Director General, Vishnu Mathur and Sugato Sen, they have speculated changes in the overall strategy for the industry post elections, but things didn’t turn up. Also, they have asked the Government to slash down GST on vehicle category to 18%. Currently, 28% of GST is being charged. The primary reason for the drop in the overall sales in the hike in the overall cost of ownership by 13% in a period of two years due to rising fuel prices in India and expensive raw material. The expensive raw material and increased insurance cost by IRDAI made manufacturers increase the cost of vehicles putting a compounding impact on the overall cost of owning a vehicle.

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With this, it seems a bit tough to see the automotive segment will bring good results anytime sooner as few manufacturers have scheduled production off for June and coming months. To this, they said that manufacturing new vehicles isn’t a good idea when the stocks are already full.

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