Officials of State Bank of India (SBI) have expressed hope that the automobile sector, which is witnessing a slowdown, would bounce back in the festival season later this year.
Last week, SBI officials met Federation of Automobile Dealers Associations (FADA) and Mumbai auto dealers to discuss the current state of auto retail.
“I am confident that the auto industry will bounce back soon in the forthcoming festival season. We at SBI are always there for auto retail industry, especially our dealer partners to work in tandem with us in these tough times and beyond,” said PK Gupta, MD, retail and digital banking, SBI.
“The aim of the meeting with Mumbai auto dealers along with FADA was to understand the current industry situation and take steps to ease the stress being faced by many dealers due to slowdown in auto sector,” Gupta further said.
Explained: Why aren’t cars selling?
Hit by a dip in consumer sentiment and by the liquidity crunch in non-banking financial companies (NBFCs), car manufacturers witnessed a sharp decline in demand last month.
Various topics, including easing of liquidity from the bank’s side, increase in credit repayment days on a case-to-case basis and how SBI can improve its services going forward, were discussed, FADA said.
“SBI further assured FADA of taking necessary steps to resolve the issues to reduce stress among auto dealers,” the Federation added.
“FADA is highly satisfied with the steps taken by SBI and we hope that more such deliberations would continue to take place,” said Vinkesh Gulati, vice president, FADA.
In July this year, Maruti Suzuki saw its domestic passenger car sales decline 36 per cent while Honda Cars India witnessed a 48.7 per cent fall in sales, over the corresponding period last year.
Toyota Kirloskar reported a 24 per cent fall, while Hyundai Motor India announced a 10 per cent drop for the same month.
Maruti Suzuki, which has over 50 per cent of India’s auto market share, saw its domestic sales decline from 154,150 units in July last year to 98,210 units in July 2019.
In fact, July unit sales for the automobile manufacturer were the lowest since June 2017, when it sold 93,263 units.