Car Sales Drop In Mumbai, Bangalore & Delhi: Is GST, Traffic & Parking Problems The Reason?

According to TOI, Mumbai has experienced a drop of 20 percent in car sales over the past one year. Car sales in Mumbai reduced to 97,274 in 2017-18 from 1.22 lakh in the previous year.

Bangalore also experienced a sales drop of 11 percent, during the same time period. The city is India's second largest car market, due to the younger and more tech-savvy population.

The country's largest car market, Delhi, experienced a marginal growth of just 1.6 percent. This is mainly because of the diesel ban during 2016-17, which helped set a lower base for comparison.

The sales drop in these major metro cities comes at a time when the all-India car sales figures increased by 10 percent.

Rakesh Srivastava, Director (Sales & Marketing), Hyundai India, stated, "Metro cities are surely seeing challenges in volume growth on account of rising trend of shared mobility through platforms such as Ola and Uber."

He further added, "The other key factor is rapidly-growing metro transportation, especially to key employment hubs such as Gurgaon and Delhi. People prefer to take the metro than driving and getting stuck in jams."

Industry experts also pointed out that, people living in such metropolitan cities have started a trend of avoiding the purchase of a second car. People now have started to use the different service offered such as app-based cabs and online orders to get their work done.

Companies like Ola and Uber have reduced the purchases of cars for their fleet, by reducing driver incentives. N Raja, MD, Toyota Kirloskar states that "The implementation of GST impacted the fleet purchases. The initial issue with implementation caused a drop in sales by nearly 50 percent in 2017.

Companies like Ola and Uber have reduced driver incentives, translating to fewer car purchases by fleet operators, says N Raja, MD, Toyota Kirloskar. He also added that GST and its initial issues with implementation also caused a drop in sales by nearly 50 percent in 2017.

Rajesh Goel, Director (Sales & Marketing), Honda Cars India, said that "Growing road congestion will make it tough to increase car demand in big metros. However, this can be offset by growing our volumes in smaller towns and non-metro areas."

Non-metropolitan cities in India has been experiencing a growth in sales volume. Car sales in cities like Lucknow were up by 25 percent compared to the previous years. Other cities like Jaipur, Chandigarh and Ahmedabad experienced a growth of 15 percent, while Kochi improved by seven percent.

Thoughts On The Car Sales Drop In Metro Cities

Major metropolitan cities across India, now have improved public transport in the form of metro networks. This along with the advent of various ride-sharing services like Ola and Uber, provide an easy way for people to commute within the city.