Economic Situation Will Go Down Further In India If Car Production Is Affected: R.C Bhargava

The automotive industry has been facing its worst ever crisis since the 1990's and car sales keeps falling to new lows every month. Just last month, the passenger vehicle segment overall is down by 23.69 per cent at 223,317 units as opposed to 292,660 units in the same period last year. The passenger cars segment took a major hit in September witnessing a YoY sales decline of 33.40 per cent at 131,281 units as opposed to 197,124 units in the same month last year. The continued decline has had an adverse effect on the automotive industry and there have been job losses as also a hold on further investments by companies. However, the relaxed corporate tax was a welcome move by the industry which was announced by the government in September 2019. Though there will be no immediate changes thanks to this move, market leader Maruti Suzuki feels that if car production is affected in the country then the economic situation will go down further.

Maruti Suzuki feels that if car production is affected in the country then the economic situation will go down further.

Speaking at the company's Q2 Result conference, RC Bhargava, Chairman, Maruti Suzuki said, "I'll need a crystal ball to predict a turnaround in sales but there's hope that it'll happen in the next few months. Car production is a major part of manufacturing in India and the auto industry is a reflection of the economic health of the country. The economic situation in the country will go down further if car production falls any more."

Maruti Suzuki reported a drop in the net profit in the second quarter of 2019 by nearly 39 per cent. The company said that there's been a 66 per cent to 60 per cent dip in passenger car sales from April to September 2019. The impact has been seen on low cost cars. Bhargava went on to state that youngsters are not buying cars in India and also said that Ola/Uber might have had an impact on sales but that cannot be quantified.