Do it yourself

To understand the current state of automobile market in India, we met numerous people in the supply chain, users and prospective buyers over the last few days. Both rural and urban markets were covered in 4 states - UP, Haryana, Punjab and Delhi. The key takeaways from my discussions could be noted as follows: (a)    A sizable number of existing 4W passenger vehicle (4WPV) users has postponed their replacement decision in past one year. Most of the users who have replaced their vehicles in past one year have up traded. SUV still remains a preference in rural area. (b)    Almost 65% prospective 4WPV buyers (mostly first time buyers) of entry level vehicles have postponed their decision to buy. Most of these prospective buyers are not likely to buy in next 6 months also. The postponement of decision is due to a variety of decision - economic uncertainty (job, profession or business), poor availability of credit, buying vehicle decision linked to ...

Conventionally, automobile industry performance is widely accepted as a lead indicator of the overall economic performance of any economy. No wonders if the recent slowdown in automobile demand is being represented as a mark of the slowdown in overall economic activity. However, the reactions from policy makers - ministers, MPs, senior advisers & bureaucrats, etc - are perplexing. They have mostly sought to trivialize the issue of slowdown either by outright rejection or some lame explanation. The suggestion of the finance minister that use of app based taxis may be a key reason for slowdown in demand of automobile has been criticized widely on social media as a completely illogical. These unmindful assertions from the official side have raised doubts over the policy makers' understanding of the current state of Indian economy. These doubts may impact the already faltering business and consumer sentiments. In this context it is important to note that— ...