Sales of low-cost cars have declined over the past few years due to rising prices, the economic crisis and the freeze on the corona virus.
Sale of high quality cars
This aside, motor vehicle analysts and motor vehicle company executives say sales of high-end cars in the market continue to rise, with buyers unaware that revenue is rising and prices are rising.
Sales are low
In the last 2021-22 financial year, sales of cars priced above Rs 10 lakh have increased five times more than sales of low-cost cars. Fiscal year 2019-20 saw sales in the passenger car market surpass 24 percent last year. In the last fiscal year ended March 2022, sales of expensive cars increased by 38 per cent, while sales of cheaper cars increased by just 7 per cent.
what is the reason
According to the Crisil study, the reason for the large gap in car sales is the “inequality in income growth among the population, the sudden rise in the price of cheap cars, the presence of only a few companies to choose from, and the introduction of new models of high-priced cars.”
First time car buyers
In India, the so-called small car market, small cars are often bought by first-time car buyers. For the first time, car buyers put off buying their car due to the Corona epidemic, freeze, low income, and so on.
Price rise
According to the Crisil Economic Research Institute, “the income of those working in medium and large enterprises has increased by 20 to 25 percent. Due to this they have shown interest in buying high priced cars. But wages for employees in small and medium-sized enterprises have risen by only 10 percent.
The reason for the decline in sales
Maruti Suzuki Chairman RC Bhargava said, “The market for low-cost cars has been sluggish for the last three years. The market size is shrinking, especially for those who use two-wheelers or small cars.
In addition, 11.50 lakh Benchless hatchbacks were sold last fiscal. It sold 15.50 lakh cars in 2018-19. The government’s severe restrictions on the sale of small cars, new regulations, tax hikes by state governments, and rising prices for car products have made it difficult for most people in the community to buy a car. Two-wheeler users, with the intention of buying a car, buy 80 percent of the car with a bank loan.
increase in price
Maruti Suzuki also raised the price of small cars by 20 per cent in the last financial year, while mid-range hatchbacks such as the Celerio and Swift rose by 38 per cent, SUVs by 13.5 per cent and mid-size SUVs by 20 per cent.
Corona infection
Ashim Sharma, senior head of the Nomura Institute of Economic Research, said: But the situation has changed since the epidemic. As the corona began to spread in urban areas, so did job losses and wage cuts. Those who bought and used small cars suffered job losses and pay cuts. The situation was similar when the corona spread to the countryside.
In addition, the government’s order to make cars with PS6 engines made cars more expensive. As the cost of manufacturing these engines increased, so did the price of the car. Cars sales have already begun to plummet due to job losses, declining incomes, and rising car prices for those caught up in pay cuts.
The ex-showroom price of the 110cc bike in 2018 was Rs 50,000. But, it is currently selling for less than Rs 70,000. Similarly, the price of small cars ranged from Rs 2.8 lakh to Rs 3.50 lakh. But at present it sells for Rs 3.50 lakh to Rs 4.50 lakh, ”he said
Last Updated Jun 6, 2022, 3:11 PM IST