Automobile sales in India saw their sharpest decline in nearly 19 years in July, dropping 18.71% and leading to 3.45 lakh job cuts, auto industry body Society of Indian Automobile Manufacturers (SIAM) said on Tuesday.
So why should this matter to you? Here’s your five-point guide:
1. The dip in domestic car sales, according to Livemint, is an important indicator that shows the economy is slowing down. India’s automobile industry employs around 3.7 crore people directly or indirectly. It accounts for 7.1% of the country’s GDP and nearly half of its manufacturing output, according to this Business Today report. While the industry has faced slowdowns before, one big concern this time is that all the segments of the industry—from manufacturers to dealerships to auto part makers—are reporting a decline in sales.
2. There have been multiple reasons cited for the drop in sales, including high GST rates, a crisis in NBFCs and a dip in the purchasing power of consumers. The crisis has led to as many as 3.45 lakh people being laid off due to job cuts at manufacturers, dealerships and auto part makers, said SIAM Director General Vishnu Mathur. Besides, jobs of over 10 lakh workers are at risk, he told NDTV. Representatives from the government have asked for a stimulus package to revive demand ahead of the festive season.
3. These staggering numbers are just one part of a larger, dismal picture. This handy guide from Livemint lays out all the other indicators that show economic activity is slowing down in India, including falling tractor sales (and hence, rural demand) and a jump in unsold housing units.
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