Industry organization Siam has stated that the automobile industry in India is going through a long-term structural slowdown as all major vehicle segments have seen a compound annual growth rate (CAGR) decline during the last three decades. According to a research conducted by the Society of Indian Automobile Manufacturers (SIAM), the auto industry was already going through a difficult phase before the Kovid-19 pandemic and last year the pandemic derailed the entire region. The industry association said the study showed that the epidemic is not the sole cause of the auto sector slowdown, but is facing deep structural issues.
Signs of long term structural slowdown
According to the research, the annual growth rate of all segments including passenger vehicles, commercial vehicles, three-wheelers and two-wheelers has shown a steady decline during the last three decades. According to the study, the CAGR of the domestic passenger vehicle industry was 12.6 percent between 1989–90 and 1999–2000. However, the figure fell to 10.3 per cent between the decade 1999–2000 and 2009–10. The growth rate declined to 3.6 percent in the last decade. SIAM Director General Rajesh Menon said the reduction in data is clearly a sign of a long-term structural slowdown in the Indian automotive industry.