The Society of Indian Automobile Manufacturers (SIAM), the national body representing all major vehicle manufacturers in India, is hopeful that sales in the automobile sector will bounce back in September due to the festive season.
"Second-quarter, there is festive season sometime in September... so we are hopeful... by that time, some of the steps for growth the government has talked about in the budget, would kick in. We are also hoping for a good monsoon, which could help shape rural sentiments," said Rajan Wadhera, president, SIAM, in an interview with CNBC-TV18.
SIAM's June report showed a 17 percent drop in passenger vehicle sales, with car sales skidding 25 percent. The two-wheeler segment also witnessed a 12 percent drop.
Throwing more light on the plight of the industry and things that can be done to revive the sector, Wadhera said, “At the moment liquidity improvement is very important. NBFCs that are holding back on funding - if that improves, things could improve.”
In the last 2-3 years, the prices have gone up due to various reasons like regulatory requirements, commodity price increases, etc., Wadhera said. "We are also looking at scrappage of old vehicles which could prep up demand," he added.
Talking about how July could turn out for the sector, he said, "Typically, July has not been a good month for sales because of monsoon and slowing of activities and this time as well July so far is not looking any better than June."
Talking about shutting down of dealerships, he said, “My understanding is that these are due to two things. One is loss of retails leading to expenses that the dealers cannot absorb and hence shutting down. Two, some dealers have also diverted funds and the current situation is funds are not available so obviously they have closed down."
First Published: IST