The Indian auto sector is facing an immense structural issue with affordability becoming one of the most consequential challenges. As a result, a joint venture like Toyota Kirloskar is failing
Exclusive: The Indian Automobile Crisis Explained
- The Indian auto industry has been going through an extended slump. The total vehicle sales in India had witnessed the precipitous fall in August since SIAM (Society of Indian Automotive Manufacturers) had started recording the wholesale vehicle sales data in 1997-98 where the overall sales in the month were recorded at 18,21,490 units against 23,82,436 units in August 2018, a major fall of 23.55%.
- According to recent media reports Toyota Kirloskar Motor Vice-Chairman; Vikram Kirloskar stated that, with the transition from BS4 emission norms to BS6 which is due to be obligated from April 2020. He said that the vehicle prices will go up further, thereby affecting affordability as the percentage of EMI’s of a consumer’s salary will rise in time.
- Adding further he stated that the demand cannot be controlled by any automobile company, the growth in the economy is the key which determines demand.
- The onset of the festive season starting in September has also failed immensely to lift the sales in the passenger vehicle (PV) with all the major automobile makers, Which Includes Maruti Suzuki, Hyundai, Mahindra and Mahindra, Tata Motors, Toyota and Honda which have reported a double-digit decline in their respective passenger vehicle sales.