Auto sales have been hit ever since the liquidty crisis marred the financial sector. Lack of demand due to illiquid market and weak consumption appetite led to steep fall in sales. According to vehicle sales data released by industry body Society of Indian Automobile Manufacturers (SIAM), domestic sales across passenger vehicles (PVs), commercial vehicles (CVs) as well as two- and three-wheelers fell 12 per cent year-on-year in June. The combined sales of all automobiles fell to 1.9 million units in June against 2. 2 million units a year ago.
While the industry body stood by its earlier forecast of 2-5 per cent growth for PVs in the ongoing fiscal year, the road ahead could be anything but smooth, it says.
According to a report by Edelweiss Securities, slowing income growth and Non-banking financial companies (NBFC) crisis, increased vehicle cost (and price) due to switch to Bharat Stage (BS)-VI fuel emission norms, stiff competition from growing organised pre-owned vehicle market, and decline in gross and earnings before interest, depreciation, and ammoratization (EBITDA) margins are some of the biggest factors affecting the industry. CLICK HERE FOR FULL REPORT