Business

Auto sector going through long-term structural slowdown: SIAM

Automobile business in India is going through a long-term structural slowdown because the compound annual progress charge (CAGR) throughout all main car segments has witnessed a decline during the last three a long time, as per business physique SIAM.

The auto business has been going through headwinds even earlier than the COVID-19 pandemic derailed the complete sector final 12 months, a analysis carried out by the Society of Indian Automobile Manufacturers (SIAM) has revealed.

The examine clearly reveals that the pandemic isn’t the one cause for the auto sector slowdown, which is going through deeper structural points that want consideration, the business physique famous.

 

According to the analysis, which targeted on business progress charges until March 2020, compounded annual progress charges of all segments, together with passenger autos, industrial autos, three-wheelers and two-wheelers have witnessed a steady drop during the last three a long time.

CAGR of the home passenger car business stood at 12.6 per cent between 1989-90 and 1999-2000.

It, nevertheless, dropped to 10.3 per cent between 1999-2000 and 2009-10 decade, the analysis knowledge confirmed.

The progress charge additional dropped to three.6 per cent within the final decade.

The analysis additional identified that contraction within the home passenger car section has been a lot steeper within the final 5 years.

From a CAGR of 12.9 per cent between 2004-05 and 2009-10, it got here down to five.9 per cent within the 2009-10 to 2014-15 interval.

However, within the final five-year interval, between 2014-15 and 2019-20, the CAGR of the passenger car section has dropped to simply 1.3 per cent.

“The numbers show a clear long-term structural slowdown in the Indian automobile market across segments even before COVID pandemic began,” SIAM director common Rajesh Menon famous when contacted over the matter.

For occasion, the passenger car market’s 10-year CAGR over the last decade FY2000 to FY2010 stood at 10.3 per cent which dipped to three.6 per cent within the decade FY2010 to FY2020, he added.

In the two-wheeler section, the CAGR has dropped from 9.8 per cent in 1999-2000 to 2009-10 interval, to six.4 per cent in 2009-10 to 2019-20, knowledge confirmed.

Similarly, the analysis confirmed a drastic drop in annual progress charge within the industrial car section. From a CAGR of 12.7 per cent in 1999-2000 to FY 2009-10, it has come down to simply 3 per cent within the final decade.

Further, three-wheeler gross sales have dropped from a CAGR of 9.8 per cent within the 1999-2000 to 2009-10 interval, to simply 3.8 per cent within the final ten years.

As per the FY20 statistics, passenger car gross sales at 27.7 lakh models have been the bottom in 4 years, SIAM knowledge revealed.

Similarly, industrial car gross sales at 7.2 lakh models have been the bottom in three years, two-wheeler gross sales at 1.74 crore models have been the bottom in three years and three-wheeler gross sales have been at lowest in two years at 6.4 lakh models.

Photograph: Amit Dave/Reuters

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