Technology

Why the auto industry is hurting so badly?

Rajesh Goel should be celebrating.

He managed to steer clear of the headwinds currently battering India’s auto industry and clock impressive March numbers for Honda Cars India (HCIL), where he is a director for sales and marketing.

Honda Cars posted sales growth of 27% in March, and for 2018-19, it reported sales uptick of 8%, the second highest in the industry.

It’s quite the feat when the industry is reeling from one of its worst sales slowdowns.

ride1In March, passenger vehicle sales dipped by 2.96%. And for the year 2018-19, sales grew at a measly 2.7%.

Yet, Goel sounds cautious. His tone is somber and mood not so cheery. “It’s a puzzle. Nobody knows why the sales are slowing,” he says. Worse, he sees a tough year ahead. Honda’s sales grew well in 2018-19 on the back of the new Amaze that contributed 46% of its total sales. He fears its charm will wear off at least partially this year.

Ride2

More importantly, two of the four quarters of 2019-20 is widely expected to be difficult — Q1 due to the ongoing elections and Q4 because of the transition to BS-VI, the new emission norm. No BS-IV cars will be registered from April 1, 2020.

Hence, companies must plan their inventory well. “It is not going to be easy. Most players would want to err on the side of caution,” he says.

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