Pune: The financial year 2019 turned out to be a difficult one for the passenger vehicle (PV) industry in India, as sales rose just 2.70 per cent in 2018-19 at 33,77,436 units, data released by the Society of Indian Automobile Manufacturers, or Siam, showed on Monday. In the previous fiscal (FY18), PV sales stood at 32,88,581 units.
In March, PV sales continued to decline by 2.96 per cent to 2,91,806 units as against 3,00,722 units sold in the year-ago month.
Auto analysts said the car industry was hit by demand slowdown due to high cost of ownership—high fuel prices and interest rates along with a rise in insurance costs--coupled with a liquidity squeeze that dampened the buyer sentiment.
“We anticipate the slowdown to continue at least during the first quarter of FY20 and the outcome of the general elections would be critical to set the course of the market,” Rakesh Batra, Partner and Sector Leader-Automotive at EY India told Financial Chronicle.
For the PV segment, the recovery is likely to take place in the second half of FY20 on the back of automaker incentives for BS IV vehicles and consumers preponing their buying decision.
Despite new product launches, sales failed to rev up during the second half of the last fiscal, which had even prompted the industry body to lower the sales forecast for PVs from the earlier estimate of 8-10 per cent to 6 per cent.
But the final figure of 2.70 per cent is even lower than that.
“FY2019 numbers slumped due to low consumer sentiment and a dip in rural market demand,” Rajan Wadhera, President at Siam said.
