Indian Passenger Vehicle Sales Growth Halts; Approx 1.5 Lakh Jobs Lost
There is some bad news for the automobile industry in India – Passenger car sales have come down this year, as 6% less cars were sold in the first quarter of 2014 compared to last year.
Total of 25.03 lakh passenger vehicles were sold in the first three months of 2014, compared to 26.66 lakh cars in the same period last year. Sale of cars fell 5% in the same period as 17.86 lakh cars were sold in this first quarter of 2014 compared to 18.74 lakh cars last year. SUVs also posted a negative growth of 5% as only 5.25 lakh cars were sold. The biggest fall came in the Vans segment which posted 20% negative growth as only 1.9 lakh cars were sold till March 31, 2014.
These facts and figures were shared by Society of Indian Automobiles Manufacturers (SIAM) which measures and reports the industry growth. In their press release, SIAM said that overall, the market grew 2.68% for the first quarter of 2014; and this marginal growth was possible only due to excellent sales of 2 wheelers and 3 wheelers.
As per SIAM, for the month of February, the industry produced 1,811,276 cars (commercial as well passenger), 2 wheelers and 3 wheelers compared to 1,734,851 vehicles last year. This represents a modest growth of 4.41% which is primarily driven by the 2 wheelers growth of sales.
2 wheelers represented maximum growth at 11% as it crossed 14.8 lakh sales volume for the last quarter. On the other hand, cars showed dismal growth trajectory as only 17,86,899 units were sold in the last quarter, compared to 18,74,055 cars last year same quarter.
SIAM is hopeful that the formation of the new government at the central will sprout automobile growth rate in the country. Vikram Kirloskar, President SIAM said, “We are hopeful that a new stable government would untie the economy knots and bring in some positive policy changes. We are not expecting any huge spurt in sales but some moderate growth is expected to happen for sure.”
Due to less growth and low car sales for 2 consecutive fiscals, there has been widespread loss in jobs and employment. Automobile is one of the biggest employment provider in the country. As per SIAM, around 1.5 lakh jobs may have lost due to this negative growth rate.
Kirloskar further said, “We at SIAM have not done a calculation of how much job losses were there, but I personally feel that across the entire value chain in the auto industry, from raw materials to dealerships, there could be around 1-1.5 lakh job losses.”
Indian automobile sector is going through a rough phase right now as various factors are contributing to its downfall. Few hours back, Maruti recalled 1,03,311 units of Ertiga, Swift and DZire as a serious manufacturing defect is causing much inconvenience to its users. Increased price of petro/diesel along with high maintenance costs and high interest rate of auto loan is preventing potential buyers from choosing their dream cars. This is second consecutive negative growth rate for Indian automobile industry.
It is being hoped that post-elections the scenario will improve and Indian automobile industry will witness a revamp.