India’s automotive industry downturn is getting worse, according to latest data from the Society of Indian Automobile Manufacturers (SIAM). BDN financial editor Roger Willis reports.
Total motorcycle, scooter and moped sales across this vast and populous country plunged by 22.2% during August, to just over 1.514 million units. Indigenous market leader Hero MotoCorp was 20.1% down to 524,003. Nearest competitor Honda fell by 26.3% to 425,664. TVS Motor and Bajaj Auto dropped respectively by 20.4% to 219,528 and 20.8% to 173,024. Royal Enfield took the hardest hit, 28.3% lower at 48,752.
SIAM said passenger car sales for the month sank by 41% to 115,000. Among big-league car producers, Maruti Suzuki was 36% down in volume and Tata Motors lost 49%. Light commercial vehicles were also on the back foot, falling by 39%.
Although a liquidity squeeze on non-bank financial services firms, which are responsible for about half of all Indian consumer credit provision funding vehicle purchases, has been blamed for this crisis, SIAM is also complaining about excessive point-of-sale taxation undermining demand. It is now pleading with the government to reduce the 28% rate of GST (Goods and Services Tax, India’s recently-introduced equivalent to VAT) levied on bike and car sales to 18%.
SIAM estimates that more than 300,000 jobs have already gone from the industry, as manufacturers scale back production and temporarily close some plants. Â
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