The Indian auto industry is by far the largest growing one in the world. With exponential growth over the last 3 decades, it has played a large role in the country’s economic growth. Yet, the last year has been tough for the market, with car sales showing a gross decline of 19.93% last month as compared to 2018 April.

Why the decline?


The continually increasing fuel price has been a matter of concern for budget-friendly buyers. Add to this the rising prices of new launches. A large segment of the car-buying public looks for fuel efficiency and value before going for a new car. When the car prices are higher and the running cost is also high, it acts as a deterrent. Add to it the fact that maintenance cost is on the rise and you have a solid reason why price-conscious Indians are not buying as many cars as they used to.

Changing Policies and Change in Government

Automotive policies directly impact buyers’ sentiment. At present, in addition to standard questions on loan interest, GST rates, price control, monsoon prediction, etc the added uncertainty of an election year worked to the detriment of the segment.


Implementation of the latest safety regulations has started in April this year in phases. All cars available for sale now are required to have ABS, seat belt warnings, speed warnings, reverse parking sensors by July 2019. New cars also have to face Bharat NCAP crash test safety principles by October this year and BS-IV emission norms by July 2020. That’s why most car manufacturers are either busy renovating their products or planning numerous launches meeting all standards. This has also played a role in potential buyers postponing their purchase decisions, waiting for brand new models.

Soaring Insurance costs

According to the modified automobile insurance norms from September 2018, a compulsory three-year third party insurance cover for new cars is to be furnished by all general insurance companies. As a result, with escalated on-road car prices, buyers are rethinking whether to buy their dream car.

Environment Consciousness Lessening Demand for Diesel Cars

The green awareness leading to the implementation of fresh BS-VI emission regulations has affected the economic viability of diesel negatively. Also, many markets in the country have minimized diesel vehicle registration as compared to their petrol counterparts. And a comparison of car and fuel price has led prospective purchasers to think twice before buying.

Easier Availability of Reliable Pre-Owned Cars

As online portals like Truebil that offer reliable and certified pre-owned cars at a fraction of the cost become more prevalent, the need to buy a new car is reducing for a large percentage of car buyers. They prefer to buy similar or higher models at a lower cost and use the rest of the money either as an investment for the future or for vacations and other leisure activities.

While more and more cars are being launched in the market, it’s imperative to delve deeper into the reasons behind the decline. After all, there’s not much point in making new cars if fewer and fewer people are actually buying them!

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