The Indian auto industry, after going through an unparalleled slow growth hopes to return with a roar in the market for the next financial year keeping high hopes on a few upgraded models to make their entry into the market.
The auto industry’s slow down also directly links to the economic slowdown in the country which did not lead customers to showrooms. Hence, the industry hopes that the economic state of our country will soon revive &improve, which will help drawing customers back to showrooms. Still, it faces a few challenges like the transition from BS-IV to stricter emission norm BS-VI & also compliance with new safety norms which makes the vehicles costlier.
The slowdown began from the last festival season & is still in continuation hence, the biennial Auto Expo which is India’s flagship motor show has been looked as a launching pad of revival.
The impact of the slowdown has been such that it records a decline of 13-17% in wholesale dispatches compared to last year & all motors including heavy-duty trucks, two-wheelers & cars were affected.
This also resulted in around 3.5 lakh people losing their jobs as the sales dropped which also caused operational hardships & re-evaluation of the company’s plans the whole year.
Society of Indian Automobile Manufacturers (SIAM) President, Rajan Wadhera quoted that with BS-VI getting implemented, 2020 will be an interesting year with also new platforms being available in the market. He also added saying that the low base of last year & availability of newer models should help in increasing the growth in the auto sector, as the Indian economy is expected to revive the coming year.
And, according to him, the growth will start from the second quarter of the coming financial year & will be visible only in the third quarter of the fiscal.
Wadhera added that implementing the new BS-VI will clear out old inventory, build new inventories as new BS-VI compliant vehicles will be available in the market, giving rise to production & sale.
On the other hand, the vehicle costs will also be soaring by 8-10% anticipating an increase in demand, but, it may also lead to volume loss, industry fears. To act against this extra cost pressure, SIAM has requested the government to reduce GST rates for vehicles from 28% to 18% & initiate an incentive-based scrappage policy for vehicles.
If the submissions are implemented a rather faster recovery for the auto sector can be expected.
The auto expo in the coming year from February 5-12 will also give a glimpse of the new entrants in the market & can prove to be a launching pad for the reintroduction of the auto industry.