If there is a trend, it looks like big ticket spending is slowing down while small ticket spending is rising up among the Indian consumer. House and car (and also jewellery) for which people have to take up large debt (except jewellery maybe) are trending down while mobile phones, apparel, fmcg, travel (going by hotel occupancy rates, domestic passenger growth in flights) are trending up. I suspect this might just be the new normal going forward as the current generation prefers to rent than own. The happiness of owning things is replaced by the fleeting yet robust happiness of renting/consuming where the large EMI outgo is replaced by smaller but repeat pleasures, without responsibility.
Does this mean economy is slowing down considerably?
CV (Ashok Leyland up 17%, Tata Motors up 22%) and Tractor (Escorts up 29% and M&M up 17%) sales for October indicate otherwise though passenger car segment is trending down. A bulk of sales in the last few years for passenger cars must have come from ola/uber fleets when there was a considerable euhoria among ola/uber drivers - this correlates with Maruti Dzire sales in the period well. Now the current capacity should be sufficient going forward and that cycle may have peaked last year, going by the avg driver monthly earnings which has come down considerably indicating oversupply. Even the cars purchased are sitting idle at home for most people as congestion makes them unusable and everyone has a two-wheeler to supplement for such scenarios. Metro constructions should only lower passenger car demand for the foreseeable future IMHO.
Housing sales is the backbone of the economy and I don’t think real sales will pick up dramatically unless prices become reasonable/affordable. I have a very negative view towards RE sector barring a few players who are almost debt free and showing sales and holding large land parcels. This is the bigger problem and there can be no real economic growth unless this sector is fixed by letting a few entities go bust. This will of course affect the rest of the economy even which is small-ticket consumption driven and also the markets but this will be a step in the right direction.
These are trends emerging and a rising rate scenario will make these more pronounced going forward I think.