India Automotive Industry: Struggling in 2020?

Demand for new cars declined sharply in 2019, forcing automakers to cut production across the year. Sales were expected to revive during the annual festive season from October 2019 but failed to do so. In fact, there was an encouraging spike in sales in Q3 – stimulated by promotional offers, aggressive discounts, new model launches, and the increasing availability of models offering Bharat Stage-VI (BS-VI) emission standard. However, volumes dipped soon after the season was over. Counterpoint Research expects the negative month-on-month sales trend will continue in Q1 2020. Despite continued difficulties, we expect the overall YoY decline to moderate over the rest of the year, with anticipation of economic interventions and industry stability.

Exhibit 1: Vehicle Sales in India (‘000 Units), H2 2018 vs H2 2019

Counterpoint India Auto Sales 2019 vs 2018