Sorry period for the local automakers continue as the industry is experiencing a sharp decline in sales while automakers are suffering from reduced profits. Depreciating Rupee value against the US Dollar, increased taxes & duties by the government and constantly rising car prices have played their part in denting the car sales.
During the first two months of current fiscal year 2019-20, passenger cars sales dropped by 31% to 27,108 units compared to 39,354 units sold during the same period last year. Then the industry recorded a massive 41% decline in sales in August 2019 as only 10,636 units were sold compared to 17,977 units sold in August last year.
Automakers are suffering from piled up inventories while sparing Pak Suzuki, both Toyota and Honda has decided to shut down their plants in certain days due to low demand. Moreover automakers which used to run double shifts are now operating on single shift basis. According to industry analysts, automobile sales may witness an even steep downslide ahead which may about 150,000 people jobless.
The dismal situation doesn’t seem to be improving in near future. According to information, the number of future booking of cars is also quite low, which would also have negative impact over sales in coming months. As per reports automakers are also suffering in the from of low income from bank deposits as there is reduced cash balance in their accounts after decline in advance payments from customers.
Although the government imposed restrictions on used car imports earlier this year, the move hasn’t helped much in favor of local auto industry which continues to post declining sales month after month.
Related: Car Sales Decline: Segment-Wise Data
Government needs to take serious steps in order to help bring the local auto industry back on track, which once used to be among the best performing sectors. Auto industry had forecasted to increase its sales to 0.3 million by 2021 and half a million units by 2022; however in the current circumstances this looks nearly impossible.