SEVERAL issues plaguing the automobile industry — including economic slowdown, adverse policies such as mandatory five years’ insurance premium, and interest on vehicle loans —seem to have taken a toll on sale of vehicles in the city. However, with the festival season taking off, along with government announcing various sops, there is a widespread belief that the sale will soon pick up.
As per number of registrations of new vehicles with Pune RTO, a 15.17 per cent dip has been noticed in sale of two-wheelers during May to July as compared to the same period last year. There has been a dip of 4.92 per cent in the number of registrations of four-wheelers in May to July as compared to the same period last year.
India’s automobile industry is going through a rough phase due to economic slowdown. Auto giant Tata Motors had halted production twice at its Pune plant in August. Even now, some sections of the car making plant are shut. The company had to halt its vehicle production activities to align its inventory according to the current market demand.
Besides slowdown, rain & floods have also affected sales
According to industry experts, besides the general slowdown, rain and floods have also affected the sale of two-wheelers. People avoid purchasing new vehicles during the monsoon season. The industry strongly feels that the situation will significantly improve in the second half of September, October and November.
As per numbers with Pune RTO, in May 2019, it registered 13,729 two-wheelers while the number last May was 15,521. Similarly, in June, the number of registrations had come down to 10,767 from 13,159 last year. In July, the RTO registered 13,315 two-wheelers as compared to 15,923 last July.
On the four-wheeler front, the registration count for May 2019 was 3,300, when the corresponding number for 2018 was 4,126. In June and July this year, RTO has registered 3,001 and 3,460 four-wheelers when it had registered 4,016 and 3,740 vehicles in June and July last year, respectively.
“Pune RTO sees highest number of vehicle registration in the entire state. Comparative dip in the number of vehicles coming for registration shows that all is not well in the market,” said a senior RTO official, who did not wish to be named. The official added that the situation was no different in other RTOs in the state.
The automobile industry, which employs about 3.7 crore people directly and indirectly, has been caught in a downward spiral apparently triggered by low consumer sentiment, non-availability of liquidity, among other factors. The demand for new personal vehicles also seems to have taken a hit with the rising popularity of app-based taxi services, which offer convenient and cheap transport. An official said adverse policies such as mandatory five years’ insurance premium and interest on vehicle loans have played on the consumer sentiment.
Abhay Bhor, president of Forum of Small Scale Industries Association, said sale of two-wheelers and four-wheelers is down for the past few months. “There is confusion among people because of the introduction of electric vehicles. They think the electric vehicles might become mandatory,” he said.
The Forum said since Finance Minister Nirmala Sitharaman has announced a slew of sops and is likely to announce some more soon, which will certainly rev up mood of the automobile sector. “This is the general feeling among industrialists,” he said.
(— With inputs from Manoj More)
