Automobile sales in India last year fell the most in more than two decades, as slowing economic activity, high vehicle prices and stricter lending rules dampened demand.
In passenger vehicles, an easing in the pace of decline in December, though on a low base, and an improvement in the rolling average in the last three months of the year led the industry to suggest that the worst may be over.
Sales across the automobile sector, from passenger vehicles and commercial vehicles to two- and three-wheelers, fell 13.8% to 23.07 million units in 2019, as per data released by the Society of Indian Automobile Manufacturers. Passenger vehicle and two-wheeler sales fell the most since the industry started reporting the numbers, by 12.75% to 2.96 million and 14.19% to 18.57 million units, respectively, last year. The fall in commercial vehicles was the most in six years at 15%, to 854,759 units.
In December, sales of passenger vehicles such as cars, utility vehicles and vans fell 1.24% to 235,786 units. Sales of commercial vehicles and two-wheelers declined by 12.23% to 66,622 and 16.6% to 1.05 million, respectively, while overall, sales dropped 13.08% to 1.41 million.
Slowdown in the broader economy and weak consumer sentiment continue to impact fundamental demand, he added.
New launches in the utility vehicle segment did help draw some buyers. For the year, while sales of passenger cars fell 18.91%, those of utility vehicles rose 4.78%. Utility vehicles accounted for 34% of sales of passenger vehicles during April-December, the first nine months of the ongoing fiscal year, compared with 13% in fiscal 2011.
A sharp increase in acquisition costs due to higher insurance premium and implementation of stringent safety rules hit two-wheeler sales. While sales of scooters dropped 16.03%, those of motorcycles fell 12.92%.