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The Transport system is the main part of the development of the  nation. Transportation plays an important role in developing any society. A good transport system makes it very easy to convey product to one place to another place. The automobile has given many people incredible freedom of society. It helps wherever want to go. The automobiles influence where people live and work and how they spend their time. The automobile itself becomes safer during the past decades with their design, interior and exterior.

Society of Indian Automobile Manufacturers – SIAM released a data on Indian automobile industry and explain that sales of all types of vehicle across the country declined by 18.71 percent in the July, 2019. The total number of vehicles sold in July 2019 declined from 22.45 lakh units to 18.25 lakh units as compared to June 2019. This decline in vehicle sales is the highest in the last 19 years.



The market leader Maruti Suzuki reported a 36.2 percent drop in sales during the month of July 2019. So here dropping the sales essentially means that the resulting decline in the aggregate demand for automobiles. So this is the indicator that the consumption pattern of Indian Economy is changing. The Indian economy is based on consumption model, so the aggregate demand slowdown means the consumption pattern comes down.


The Indian manufacturer cuts in the production it means that due to issue in demand the effects that supply is also coming down. The raw material industrial would be seriously affected. Secondly, another factor is the labour resource, in order to produce less, the labour requirement will also come down that means many labour workers will lose the job.


This is forecast by some consumer, are waiting to purchase vehicles with the new Bharat Stage (BS – VI) emission standard, which has been decided to be implemented from April 1, 2020. Now a day environment is becoming a big issue in developing countries. Another side, Indian automobile manufactures cuts in their production and issue in demand. The issue has increased substantially increased in fuel price, higher interest rates of banks and increased auto insurance costs. A future expectation by the consumers that government maximum focus on electric vehicles. The less consumption of diesel and petrol for decreases the Global Warming related issues. In this current scenario festival season also failed to increase the demand, which led to a huge stock of vehicles with automobile companies.

Beside this, Non – Banking, Financial Companies (NBFC) were also suffering from crises. The two wheeler company, companies down their 11 percent in rural areas. Apart from this, GST is also being directly considered to play a major role for the slowdown in the  automobile sector. Currently the GST rate for the all vehicle is 28 percent due to which the total cost of the vehicle also increases.


The automobile industry demands that the current GST rate of 28 percent be reduced to 18 percent so that the price of vehicles can come down. Secondly, demands that government should take some measurement and clear policy for electric vehicles and provide in an easy loan facility to the automobile consumers


About the author

Dasharath Maurya


  • बहुत ही अच्छा लेख लिखा है आपने सर थैंक यू सर ये जानकारी आपने साझा की

    वीरेंद्र गुप्ता

  • I am no economics expert but from what I heard from in-laws in small town is that people are saving money as business is slowing down due to lack of cash. Rural and small town people loves cash transactions, they used to save a lot of tax. One can say its because government is tightening noose on cash transactions or because banks have started doing a lot of due diligence when giving loans to small industries. Also, one major source of cash is real estate dealings which has slowed down due to stricter transaction norms (RERA etc). It will be interesting read a proper analysis from experts. It is worth noting that GST collection still was above 1 lakh INR this month despite such a slowdown in auto industry.

  • It is showing that you have actual research knowledge . Your analysis is good and benifited for research scholars.
    God bless you

  • Respected sir ! you have to present your views in right way, i impressed on graphical presentation on automobiles industry recessions 2019. finally dear sir you have to present fantastic way .

  • Great attempt bhaiya to highlight the keep reasons for the shattering Automobile sector..
    Dr. Shantanu Saurabh..

  • Government should take proper measures to help out the automobile sector which is suffering alot due to decline in the sale of vehicles.

  • By 2026, India’s automobile sector must contribute 12% of GDP: Maruti chief. The Indian automobile industry can contribute over 12 per cent to the country’s gross domestic product (GDP) and generate around 6.5 crore additional jobs over the next decade, said Maruti Suzuki India (MSIL) Chief Kenichi Ayukawa.

  • Respected Sir,
    Thanks for giving the information regarding for the respective industry as today’s trend are unaware of this.

  • Thank you for giving us deep insights into the issues of automobiles sector.. it was really helpful and a worth read!

  • As I concern to this topic the most important cause of slowing down of vehicle sale is declaration of B(vi) model which is coming very soon in Jan 2020 and automobile companies have to switch their production process towards battery operated vehicle. From the environment point of view it is a good decision but from economy point of view it is bad.

  • At least 2.5 lacs employees have lost their job in automobile sector. It is not good indication for economy in our country.

  • Sir, this is valuable information given by you. Good work for enhancing the knowledge. Thanks.

  • Reform for the purpose of boosting the economy is a welcome step.
    But Recession On Automobile Sector is the bad effect of Reform if it is not executed properly and damage the economy.

  • Nice sir it is fact information given by you and present the recession condition on automobile sector

  • Great article sir.
    This type of article will help in my career…
    Thanks sir…🙏🏼🙏🏼

  • Great article and fact based information 👍.
    The description is well with appropriate words.

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