Two years ago, India’s car market was booming. Consequently, global players rushing to invest. Yet, the market has been slammed into reverse. According to figures released by the Society of Indian Automobile Manufacturers on Tuesday, the sales plunged 31% in July.
It is the ninth straight month of declines. Moreover, it is also the sharpest one-month drop in more than 18 years. Over the past five years, India had been a hot spot for carmakers. Its annual sales of vehicles raised by 33%.
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India was predicted to overtake Germany and Japan to be the world’s third-largest car market by 2020. However, India’s big carmakers are now suffering. New regulation on safety and emission has driven up prices. Moreover, troubles among India’s customers’ finance worsen the situation.
Big Players’ Lost
Hyundai and its subsidiary Kia have invested billions to expand in the country. Hyundai has become India No. 2 player. Yet, its sales fall 10%. Meanwhile, new players like, Chinese state-run carmakers SAIC have also tried to grab the opportunities.
Maruti Suzuki accounts for roughly half of cars sold in India. Yet, it reported a 36.7 % drop in its vehicle sales in July. Tata Motors, which owns Jaguar Land Rover also plunged 31%.
Mahindra & Mahindra (MAHMF) is the leading Indian electric vehicle manufacturer. It is also suffered a 17% slump. Toyota’s, Japanese giant, sales also fell 24%.
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Job lost
The slump has prompt massive job cuts. There are over 330,000 jobs in car dealerships and component manufacturer slashed. Carmakers in India have directly axed at least 15,000 temporary workers.
India is among several big car markets that face a major slump. The global car industry currently struggles with trade tensions. Besides, it also has to deal with the economic slowdown, new technologies, and regulatory changes. China, the world’s biggest car market also fell for the first time in 2018.
