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Is auto industry going through worst crisis? Data says yes
Last updated on Sep 09, 2019, 05:22 pm
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As the Indian auto industry undergoes a crisis amid a broader economic slowdown in India, automobile sales dropped sharply in August, the worst decline since 1997-98.
As per data released by the Society of Indian Automobile Manufacturers (SIAM) on Monday, year-on-year (YoY) sales dropped for the tenth consecutive month.
Additionally, percentage sale of two-wheelers also hit a three-year low, the worst ever.
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In this articleOverall passenger vehicle sales fell 31.57%; car sales dropped 41% Two-wheeler sales fell by 22.24% in August 2019 Medium/heavy vehicles witnessed massive 54.3% decline in sales Industry leaders seek GST cut to boost sales Maruti Suzuki, Mahindra & Mahindra cut production; lay off employees No relief from GST; sector eyes next GST Council meet
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Data
Overall passenger vehicle sales fell 31.57%; car sales dropped 41%
![Overall passenger vehicle sales fell 31.57%; car sales dropped 41%]( "Overall passenger vehicle sales fell 31.57%; car sales dropped 41%")
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In August, overall passenger vehicle sales dropped by 31.57% to 196,524 units against 287,198 units in August 2018, SIAM data cited by NDTV revealed.
Passenger car sales also dropped by 41.09% to 115,957 units from 196,847 units in August 2018.
Comparably, utility vehicles dropped by 2.2% to 71,478 units from 73,085 in August 2018, while van sales dropped by 47.36% to 9,089 units from 17,266 in August 2018.
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Other vehicles
Two-wheeler sales fell by 22.24% in August 2019
![Two-wheeler sales fell by 22.24% in August 2019]( "Two-wheeler sales fell by 22.24% in August 2019")
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Reportedly, two-wheeler sales also dropped by 22.24% in August 2019 as sales fell to 1,514,196 units sold last month as compared to August 2018.
For scooters, motorcycles, and mopeds, sales witnessed a 22%, 22%, and 21% fall.
For commercial vehicles, only 51,897 units were sold last month against the 84,668 units sold in August 2018, registering a 38.71% decline.
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Data
Medium/heavy vehicles witnessed massive 54.3% decline in sales
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Among commercial vehicles, medium and heavy vehicles independently witnessed a massive 54.3% decline in sales with 15,573 units sold last month against 34,073 in August 2018. Light commercial vehicle sales also dropped by 28.21% to 36,324 units sold last month against 50,595 in August 2018.
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Auto industry
Industry leaders seek GST cut to boost sales
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To note, the auto industry has been going through a slump which was addressed at the recent SIAM and ACMA conventions.
Reportedly, the sector seeks a reduction in GST from 28% to 18% to boost sales during the festive season.
Industry leaders believe a GST rate cut, even for some time, would help regain consumer sentiments, which had weakened in the recent past.
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Information
Maruti Suzuki, Mahindra & Mahindra cut production; lay off employees
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To deal with the auto industry slowdown, India's largest carmaker Maruti Suzuki suspended production in Gurugram and Manesar plants in Haryana for two days and laid off 3,000 temporary workers. Mahindra & Mahindra (M&M) along with other companies also cut production and laid-off workers.
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Government action
No relief from GST; sector eyes next GST Council meet
![No relief from GST; sector eyes next GST Council meet]( "No relief from GST; sector eyes next GST Council meet")
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However, a two-day meeting of the GST fitment committee last week gave no assurance for a GST cut.
Meanwhile, the government lifted a ban on new vehicle purchases by state-run departments and offered concessions.
Transport Minister Nitin Gadkari also said that the government was considering cutting taxes on petrol/diesel and hybrid vehicles.
The industry now awaits the next GST Council meet on September 20.
