In what is seen to be the steepest fall in 19 years, the sale of vehicles across categories in July slumped by 18.71% to about 18.25 lakh units down from about 22.45 lakh units a year ago in the same month.
There are many factors that contribute to the decline of the industry. From an increase in fuel prices, interest rates and vehicle insurance costs to the inventory pile up because of IL&FS crisis and the long customer wait for Bharat Stage-IV to roll out.
Some other major reasons for the diminishing growth is that there has been a trend for rental cars, buying second-hand cheaper cars and the government’s huge emphasis on environmental-friendly electric vehicles. These factors have led to 2 lakh people losing jobs in the auto industry and it is imperative for the economy to rethink of ways to revive the auto industry.
The sector is expecting the government to come up with a plan to reduce GST from 28% to 18% and also with the festive season just around the corner there is still hope that the industry will make a comeback.