The Society of Indian Automobile Manufacturers (SIAM), in a research conducted by it, has said automobile industry in India is going through a long-term structural slowdown as the compound annual growth rate (CAGR) across all major vehicle segments has witnessed a decline over the past three decades. It said the auto industry has been facing headwinds even before the pandemic derailed the entire sector last year.
It noted the study clearly shows that the pandemic is not the only reason for the auto sector slowdown, which is facing deeper structural issues that need attention. According to the research, which focused on industry growth rates till March 2020, compounded annual growth rates of all segments, including passenger vehicles, commercial vehicles, three-wheelers and two-wheelers have witnessed a continuous drop over the last three decades.
It showed that CAGR of the domestic passenger vehicle industry stood at 12.6 per cent between 1989-90 and 1999-2000. It, however, dropped to 10.3 per cent between 1999-2000 and 2009-10 decade. The growth rate further dropped to 3.6 per cent in the last decade. It further pointed out that contraction in the domestic passenger vehicle segment has been much steeper in the last five years. From a CAGR of 12.9 per cent between 2004-05 and 2009-10, it came down to 5.9 per cent in the 2009-10 to 2014-15 period.
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