The downturn in the Indian automobile industry continued unabated with November overall sales declining 12.05 percent to 1,792,415 units (November 2018: 2,038,007). Respective segment-wise figures also point towards a clear downward trend with PVs declining to 263,773 units (November 2018: 266,000 / -0.84%), CVs dropping to 61,907 units (November 2018: 72,812 / -14.98%) as well as two-wheelers nosediving 14.27 percent to 1,410,939 units (November 2018: 1,645,783).

Looking at the April to November performance of the industry, there's an overall drop of 15.95 percent to 15,705,447 units (18,686,895) while in the PV segment, there has been a decline of 17.98 percent to 1,882,051 units (2,294,502). CVs dropped to 504,080 units (647,278 / -22.12%), three-wheelers to 453,459 units (477,163 / -4.97%) and two-wheelers slumped 15.74 percent to 12,864,936 (15,267,778).

The wholesales in November saw that within the PV segment, UVs posted a significant growth of 32.70 percent and clocked 92,739 units (69,884) in a sluggish market and clearly, were the ones to give a charge to the otherwise slowing segment. According to Rajesh Menon, director general, SIAM, "UVs had started doing very well last month itself and that is the reason why the PV segment is showing a lesser decline, alongside the impact of the low year-ago base. New product launches are driving consumer demand and that is clearly helping the market." Passenger cars continued to decline and reached 160,306 units (179,783 / -10.83%) as well vans showed a drop and clocked 10,728 units (16,333 / - 34.32%).

After a rigorous inventory moderation drive during the festive season in October, production in the PV segment also showed a growth in the month of November with total production reaching 290,727 units (279,382 / +4.06%). "However, even as financing at the consumer side has improved, problems are still being faced at the dealer-end," said Menon.

Retail data from the Vahan dashboard indicates at a 6.25 percent uptick in PV retail sales in the month to 313,061 units (294,649), with CVs going down to 79,547 units (87,033 / -8.60%) and two-wheelers too showing an improvement with retail sales of 1,752,903 units (1,675,761 / +4.60%).

In the CV segment, M&HCVs registered cumulative sales of 17,039 units (25,372 / -32.84%) and LCVs clocked 44,868 units (47,440 / -5.42%) in the month. While passenger carriers showed growth in both the sub-categories, selling 3,364 units (2,069 / +62.59%) in the M&HCV and 2,898 units (2,357 / +22.95%) in the LCV space, respectively, goods carriers, however, declined owing to the lack of commissioning of new infrastructure projects in the country. Goods carriers registered sales of 13,675 units (23,303 / -41.32%) within M&HCV and 41,970 units (45,083 / -6.91%) in the LCV space, respectively.

While three-wheelers were the only ones to show a positive growth with sales touching 55,778 units (53,401 / +4.45%) in the month, it could be attributed to the low year-ago base. The two-wheeler segment saw scooters slump to 459,851 units (521,542 / -11.83%) and motorcycles go down to 893,538 units (1,049,651 / -14.87%). According to Menon, "There needs to be a revival in rural consumption to spring the segment back into action. The sluggish rural consumption is a structural issue and we are hopeful that the demand would revive soon."

"In case of PVs and three-wheelers, the positive growth is on a lower base and we should see a similar trend in the coming months. Challenges continue even going forward and we cannot yet conclude that the recovery has already happened. There is still negative growth and it is still a worry area for the industry, and there's a long way to go before we completely overcome the challenges," he added.

"A GST rate cut from 28 percent to 18 percent continues to be our recommendation to the government for the next Budget and we want automobiles to be taken out of the 'sinful goods' categorisation under the tax regime. It is very hard to predict the exact number, but FY2019-20 should remain negative as it is very hard now to catch up and close with a positive growth rate," Menon said.

Early availability of BS VI fuel
While BS VI fuel has been made available in the national capital region, availability pan-India is still a factor of uncertainty within the auto industry. "As we move closer to the deadline, companies are focusing on launching new BS VI-compliant models, but, there still remains a dilemma over the availability of BS VI fuel. We are in dialogue with the Ministry of Petroleum and Natural Gas to advance the availability of BS VI fuel by February, and allow for a smoother transition, especially for CVs," Menon said.