Auto industry body SIAM (Society of Indian Automobile Manufacturers) has said that manufacturers may have to cut FY20 auto sales estimates if the current slowdown continues. This after sales data for July reflected that passenger car sales were down 36 percent year-on-year (YoY).
While commercial vehicle (CV) sales are down 26 percent compared annually, there is no respite for the two-wheeler segment as well. The sales are down 17 percent when compared to the same period a year ago. According to sectoral experts, the lack of liquidity from NBFCs (Non Banking Financial Company) is one of the key reasons behind the auto slowdown. On top of it, banks demanding 25 percent collateral for inventory financing has also impacted dealers majorly.
On the back of this slowdown, CNBC-TV18’s Parikshit Luthra spoke with industry veteran RC Bhargava, Chairman of Maruti Suzuki, on his reading of the situation and what steps are need to be taken to overcome the slump.
Bhargava has said that the trigger for the slowdown changed in the first quarter of this fiscal with regulatory changes increasing the price of cars.