The automobile industry in India is facing depression for the 8th month in a row. With no sign of reviving marketing heads seek government help.
June was considered to be the 8th month of the slowdown of the automobile industry. Though there were expectations of revival after the stable BJP government in power, there is no sign of relief till now. The story is the same for two-wheeler industry as well where top companies live Hero Honda, Honda Motorcycles, Scooter India, Royal Enfield are facing a double-digit drop in the sales which has to lead them to incur a substantial loss in the past eight months.
Top car manufacturers such as Maruti Suzuki, Hyundai, Tata Motors and Toyota are offering luring offers to clear their inventory and are providing massive discounts, but all seems in vain with no sign of an increase in sales. Companies and industry lobby grouping Siam have sought a cut in GST rate from 28% to 18% but till now there I no sign ineffective turnover.
The sales and marketing director of Hero Hondo India, Mr Rajesh Goel says, “The industry is going through its worst slowdown.” The company has recently launched a new model of Civic Sedan, but it has brought no changes to the sales report of the company.
Rajan Wadhera, who is the president of Mahindra Automobiles and the chief of Siam, says, the industry “urgently requires support” from the government. “It’s an unprecedented situation. It is very grim.”
The automobile industry is worried that even the launch of new models is not taking the upper hand in making the situation better. For example, leading automobile manufacturer like Maruti launched WagonR Hyundai drove in mini SUV Venue, and Toyota the Glanza hatch. But there has been no measurable move in the sales of cars.
This slowdown is witnessing the closure of dealership across India. This is because, with a massive drop in sales, car dealers are struggling with the cash flow and are unable to roll new models in their showroom. The sudden depression has forced dealers to close their business in cross brands as they are not able to meet the working capital requirements.
N Raja, deputy MD at Toyota Kirloskar Motor, said, “Economic, monsoon uncertainty, high-interest costs, tight liquidity and apprehensions surrounding BS6 introduction in a few months have steered the slowdown.”