UPSC Current – Wholesale passenger vehicle sales up 14% in October: SIAM
Wholesale passenger vehicle sales up 14% in October: SIAM
Why in News?
- The Society of Indian Automobile Manufacturers (SIAM) on said wholesale passenger vehicle sales, i.e. the passenger vehicles dispatched by manufacturers to the dealers, continued its upwards trend, rising 14.19% in October due to festive demand.
Challenges to Automobile Sector
- High Competition
- Over the past five years, the size of pre-owned market has expanded significantly, with higher share of organised players.
- For instance, in passenger vehicle, a significantly higher growth in pre-owned cars over the past two years is a reflection of rising consumer interest in this segment. This may impact new vehicle demand, especially in case of sharp price hikes.
- Slowdown in new car sales suggests that the demand is shifting towards a pre-owned car market because of significantly lower costs of second-hand vehicles as compared to the new ones.
- The pre-owned car market in India has been expanding considerably in the past few years and buying and selling of second-hand cars exceeded the sale of new cars in 2018- 19.
- Further, the increased availability of automobile rentals, tech-led disruptions like shared mobility from firms such as Ola and Uber, promotes consumers to rent vehicles instead of buying them.
- Factors like the lack of a clear migration policy towards Electric Vehicles (EV) creates confusion among buyers, deficit monsoon and liquidity crunch in the economy are also contributing towards a reduction in auto sales.