why auto sales are down

Why Auto Sales Are Down

A declining auto sale is on trends both in developed and developing countries over the years. This is not is one segment of the automobile industry. All the segments are being affected by the slowdown. Even affordable two-wheelers are also facing downwards sale trends. There are many reasons behind it, both domestic and non-domestic. Market researchers are worried about the declining trend in the economy. Therefore, the question is why auto sales are down?

Why Auto Sales Are Down

1. Declining Purchasing Power

Drop in the purchasing power of people is the main reason. There is a big change in the earning trends of people globally. Expenses of the peoples are multiplying day by day. Lifestyle has become sophisticated. As a result, little money left behind.

2. Emission Control Standards

Due to global warming and climate change, many countries are adopting world-class emission norms. Following these norms affect the domestic car industry. Vehicles with the latest emission standards (Bharat Stage VI) are costly to buy.

3. Cheaper Cabs and Taxis

Another cause of slow auto sales is cheaper taxis and cabs. People think better hiring a taxi (Ola and Uber) than to keep a personal vehicle to cover short distances. More than 50% of families do not possess personal cars due to cheaper cabs.

4. Growing Maintenance Cost

This is another reason for automobile slowdown. Cars with new features and higher CC engines have a big maintenance cost. For instance, the disc brakes in vehicles. They perform well and are costly than the traditional drum brakes.

5. Government Tax Rules

Another cause of falling auto sales is domestic and international tax rules. Governments of native countries are enhancing taxes for meeting the expenditures. This is an extra burden on consumers’ pockets.

6. Soaring Fuel Prices

The prices of fuels are not in the hands of any country. Oil exporting countries change prices as per international markets. A country like India affects much as it imports almost 75% oil from gulf countries.

7. High-Interest Rates

High-interest rates and cost of financing also a reason for the auto slowdown. Many people buy vehicles on finance against monthly installments. Recent, the interest rates have increased many times. So, consumers are shifting either to hired cabs or rejecting car purchase ideas.

Can Auto Sales be Up?

It is not sure and when this slowdown will come to an end. But market predictors saying after a few years the growth will come back to normal. Because after a change in an economy set-up, it takes time to adjust to the new things. Such as in India, many changes have been introduced in recent years to boost economic growth. Some people think the new norms are against their business set-ups. But in the long term, they are good for everyone.


Some of the reasons will go away with the passage of time. Others will remain to face. The slowdown is not only in the auto industry but also in the rest of the sectors. Automobile companies should find some ways to boost growth. They should keep in mind the earning trends of consumers as well.

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