The downturn in the Indian automobile sector is refusing to subside with the major carmakers reporting sharp decline in sales numbers in August 2019. Major players such as Maruti Suzuki India, Hyundai Motor India, Tata Motors and Mahindra & Mahindra have witnessed their sales sliding.

According to Automotive Component Manufacturers Association of India (ACMA) President Ram Venkataramani, the sector is going through a rough phase. “Component manufacturers depend heavily on domestic original equipment manufacturers (OEM). When the domestic OEM drops schedules and sales, obviously the component makers also cut back on their production days. Therefore, we would see a similar drop as what the OEMs have announced,” he said.

Speaking about production cuts and plant shutdown, he added, “It is pretty similar to what we have been hearing over the last few months and I would say July and August has been probably worse than what it was in the past. Those numbers are reflecting on the OEM sales figures that have been announced as well. About 20 percent is what we would anticipate as reductions depending on which segment of the OEM they are exposed to."

Venkataramani said the recent announcements on the goods and services tax front by the government has not led to an uptick in sales. “But it is still early days. The finance minister has announced additional liquidity into the market and MCLR-based lending and I think all this will take some time to trickle down. The government has been making some noises about a potential GST reduction. So we are hopeful that there is some announcement in that regard over the next couple of weeks,” he said.

First Published:Sept 4, 2019 5:28 PM IST