Indian automobile industry is hoping for a turnaround in the next year(2020)

Beaten by a never-before-seen slowdown, the Indian automobile industry is fiercely pinning hopes on the next financial year for a turnaround, banking on many new and upgraded models scheduled to make their way to the market.

The industry's hopes are also in line with expectancy that the economy would finally pop out of the slump, drawing automobile customers back to the showrooms. Yet, the challenges of transition to stricter emission norm BS 6 from BS 4 and compliance to new safety norms thereby making automobiles costlier are hiding around the sector.

With India's flagship auto show the biennial machine exhibition around the corner, the auto mobile sector is treating the show because the launching platform of revival, having been through an unusual slump, that began from the last ritual season and continued intense until date.

From two-wheelers to cars and serious duty trucks, all segments of the arena were within the red. Such has been the impact of delay that the business is predicted to shut 2019-20 with a decline of 13-17 per cent in wholesale dispatches as compared with last fiscal year.

The steep drop in sales caused operational hardships for several firms and production plans had to be re-evaluated through the year. The sector, together with dealerships and automobile parts, witnessed around 3.5 lakh individuals losing jobs due to the downturns.

Despite all difficulties, there is still hope. Business Body Society of Indian Automobile Makers (SIAM) expects things to turnaround in 2020-21.

"2020 will be an interesting year with BS 6 getting implemented and entirely new platforms being available in the market," SIAM President Rajan Wadhera told in a recent interview. The Indian economy is anticipated to revive early next year, which along with the low base of last year and availability of newer models should support growth in the auto sector," Wadhera said.

According to him, the sector is expected to start reviving from the second quarter of the next financial year but it will be visible from the third quarter of the fiscal.

"Implementation of BS 6 norms will mean clearing of all old inventory, building up new inventory and making available new BS-6 compliant vehicles in the market, which will give some upside to the production and sale," Wadhera noted.

However, with vehicle cost going up by 8-10 per cent due to technology ramp up, industry fears that it could further lead volume loss.