The new Motor vehicle act has provisions to increase already hefty fines by 10 percent every year, when inflation has been below 4 percent. Same with minimal salary hikes. What was BJP thinking...
Indian Economy : News,Discussions & Updates
- Thread starter Butter Chicken
- Start date
-
- Tags
- indian defence forum
One of the reason for slowdown in auto sector is over production over the last years which resulted in excess inventory. For some reason the no of cars sold reported every month was out of the factory rather than out of showroom. Though actual car sell was growing by 4-5 %, production was growing at 10% rate. This resulted in accumulation of inventory and a sudden drop in production from 2019 April onwards. Auto makers have to sell the excess inventory before BS 6 kicks in and can't afford to produce at the previous rate. All these hue and cry by automakers is to extract GST cut from government.
The used car market is still growing in double digits, and is now as big as the new car market.. with number of vehicles sold 1.2 times the number of new vehicles sold... Government had cut GST for used cars... Whereas for new cars it's still very high..
Used Cars, Not Just Millennials, Likely Behind India Auto Slowdown
States are going slow with implementing the new penalty rules. In Karnataka BSY has already asked his transport dept to slash fines for trrafic violation. Gujarat has also order smilar cut in the fines. In Kerala the LDF government has asked the the motor dept to go slow on implemetingnthe new rules. There is also increasing signs that the new rules will make way for increase in traffic police corruption. Instead of paying tens of thousands of rupees in fine, traffic violators are more than willing to cough up a few thounds of rupees in bribe to the traffic cops and get away with it. The hefty fines are impractical in the long run.
Karnataka to slash penalty for traffic offences: BSY
Gujarat slashes fines for traffic offences
Kerala: Motor vehicles department to go slow on new rules
More than anything else the biggest factor for the slow down appears to be the lack of consumer confidence and their willingness to spend. I don't know if there are any reliable figures for tracking the growth of personal loans given by private and non-private banks in the range of 1-2 lacs. I wont be surprised if the growth of lending for personal loans has shrinked or is even showing negative growth. My colleagues who are chronic personal loan addicts, who depend on personal loans from buying household gadgets to clearing credit card bills, claim not to have taken any personal in the last 1.5 years. Surprisingly it appears even the banks are not pestering them to clear their dues on time. There is a general sense of uncertainty regarding unemployment, salary hikes, etc among the middle class which is keeping them on tenterhooks and spending is the last thing on their mind right now.
Before I could pen a response, it seems most members here posted their responses, uncle. Moreover, eveb if one buys your argument of MG Rover being in a segment of relatively low demand, it certainly doesn't explain the enormity of positive response they received.
Besides, how would you explain the performance of Kia Motors who're targeting the economy segment. The fact of the matter is that the auto industry has shown growth on a year on year basis for the past two decades. A correction was certainly on the cards. Too bad they didn't anticipate it. They certainly seem to be making up for their lack of anticipation by blaming everyone but themselves and piling on pressure on the GoI to help them liquidate their ever rising inventory levels.
MG sold Because its is a very good buy at that price. Its booking after a launch vs cars already selling in numbers. Taking those in to consideration do not make sense. There is no comparison point. Kia's is not in economy segment. Its starts around 9-10 lakh.
These argument makes it looks like down turn assumption is based only on car sales. Every economic output numbers are down. So no point going on at this.
Liquor Sales Keep Economy Buoyant In Kerala Amid Slowdown
In three days!. And they say there is some 'economic' slowdown.
In three days!. And they say there is some 'economic' slowdown.
Your argument is contradictory. On the one hand you've claimed that MG is a steal at that price band and on the other you state Kia's not an economy brand ( which it isn't. My mistake for writing it's one) . How then do you explain why Kia has reported record bookings?
I agree that every performance metric has reported a fall in figures for economic output across sectors. While this certainly has depressed auto sales, that's not the only reason. A great deal of other factors are also involved in the slowdown which as the articles I've quoted clarifies , isn't universal.
No it does not. MG got so many bookings because its a good deal for people who can afford those (10+ lakh class including kia). Who are not that fast effected by economic cycles.
By that logic, Audi, Benz, etc should've been reporting record growths too, given that people who buy these are relatively unaffected by economic downturn.
How many 10+lakh cars can you see here?
Premium cars represent a minority in total numbers (Obviously!). maybe 10-15 %. Thus numbers of a debutante in it doesnt count much.
And They are not recording growth solely to measure economic activity.
By your logic this could be taken as a measure to prove there is no slowdown.Liquor Sales Keep Economy Buoyant In Kerala Amid Slowdown
In three days!. And they say there is some 'economic' slowdown.
I think it's common knowledge that the premium segment doesn't fall into the category of volume based cars, which constitutes the economy segment. Your graph is noted.
How many 10+lakh cars can you see here?
Premium cars represent a minority in total numbers (Obviously!). maybe 10-15 %. Thus numbers of a debutante in it doesnt count much.
And They are not recording growth solely to measure economic activity.
By your logic this could be taken as a measure to prove there is no slowdown.
However, you began your argument by citing falling auto sales across the board , which isn't the case, as I pointed out. Moreover, both Kia & MG don't exactly have top brand recall as far as the Indian markets go . All the more reason, I'd expect Indian consumers to be more circumspect when it came to exercising their choice which clearly doesn't seem to be the case in the articles I've quoted.
