While, more cars on our roads do mean the real threat of cities coming to a gridlock, negative sales for the auto sector is bad news too

It’s a bit of a catch-22 situation. A Yale-Columbia study released earlier last year showed that India has the most toxic air in the world. The national capital counts six million vehicles and adds about 1,200 more every day. It is expected that in the next five years, the maximum speed at peak hours is expected to drop to 5 km per hour on all major roads in the capital.

Then there is another set of data. According to apex industry body Society of Indian Automobile Manufacturers (SIAM), car sales would be in the negative for the first time in over a decade. While many in the industry were expecting a flat growth, the data released by Siam came as a rude shock.

According to Siam, in January 2013, passenger car sales declined by (-) 12.45 percent over January 2012. Total passenger vehicles sales also declined by (-) 4.62 percent in January 2013 over same month last year. The biggest worry is, however, on the Commercial Vehicles segment, which registered dip of (-) 0.37 percent in April-January 2013 as compared to the same period last year. While Medium & Heavy Commercial Vehicles (M&HCVs) declined by (-) 21.37 percent, Light Commercial Vehicles grew at 15.48 percent.

In January 2013, M&HCVs sales further declined by (-) 38.96 percent over January 2012. This shows the profound impact of a sluggish economy on a sector heavily dependent on sentiment.

Passenger Vehicles segment grew at 6.80 percent during April-January 2013 over same period last year but Passenger Cars declined by (-) 1.80 percent. During April-January 2013 Goods Carriers registered de-growth at (-) 10.09 percent. For someone caught in the perpetual traffic jams of Delhi, a deceleration in car sales would be good news. That, however, is not desirable.

More cars on our roads do mean the real threat of our cities coming to a gridlock, negative sales for the automotive sector is very bad news.

For thousands directly employed in the sector to the millions involved in indirect ways, the auto sector of the country is an important segment and measures have to be taken to correct the situation. As for the traffic mess, building new roads and beefing up our infrastructure is the answer.