FM while explaining the causes of the on-going slump of the Indian automobile sector has opined that it has been due to proliferation of cab aggregators and a change in mindset of the millennials who are giving preference to app-based cab services instead of buying cars. Expectedly there has been reactions to this, particularly from millennials themselves, along with views and counter-views from various stakeholders. It is obvious that there will be no dearth of debates over this view which will continue over some time and also dwindle in natural course. But there will be little differences of opinion regarding the fact that Indian automobile industry is under mounting stress and there are no solid signs as of now for an immediate turnaround. This must be the overriding concern above all others, including ‘theories’ that are propping up, with the intensification of the hunt for solutions that the entire economy is waiting for.
There are convincing reasons which go exclusively by the parameters of the subject of economics, why auto industry is given such a huge importance. As per available theories that had also been supplemented by real time market observations, it is always a convention to consider health index of automobile sector as a very reliable indicator to arrive at a conclusion of the state of health of the overall economy. This holds good for all open-market economies and this has exactly been the case for India as well in the current contest of its crestfallen economy. It seems everything is at a nadir since GDP has touched a record low 5% in last six years and when it comes to automobile, it’s undoubtedly facing its worst since last 22 years. According to latest Society of Indian Automobile Manufacturers (SIAM) data, vehicle sales across various  categories has seen an average decline of 23.55%, which in unit-wise  translates to 18,21,490 units from 23,82,436 units in August 2018. This  auto ‘low’ speak volumes why the country’s economy is faltering at the moment, more so because it is a key part employing millions of people directly or indirectly and contributing more than 7% to GDP. That the auto component industry which employs around 50 lakh people is bracing up for 15-20 per cent retrenchment in addition to the 2 lakh jobs that had already been lost, depicts the gravity of the situation in very clear terms.
Although various steps that were announced recently had been hailed, there are also views for more of such immediate doses for pulling the sector out of ‘coma’. In any case, it must be indisputable that sooner the automobile sector is out of the blues, the faster will be the prospects for the economy to make a turnaround.

---

Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

<< Back to News List