Car companies in India will now be feeling the huge sigh of relief as the sales for passenger vehicles have registered an increase during the month of August. It is for the first time that sales for cars have increased after a prolonged spell of nine months. The car making industry recorded a 15.37 per cent increase in sales during August 2013. The leading car manufacturer of India, Maruti Suzuki has set a precedent for others by heavily contributing to the growth of industry. As revealed, the total sales for passenger car vehicle in August 2013 stood at 133486 as opposed to the last year's figures of 115705. The main catalyst for deriving these high sales was Maruti Suzuki, which posted a staggering 52 per cent increase in sales during the second half of the current year as compared to same period last year.
This strong showing of Maruti Suzuki has significantly contributed to snap the nine month consecutive streak, which was mainly helped by the burdening fuel prices and mounting interest rates. However, some segments of passenger cars are still bearing the brunt of low sales with the major example being of utility segment, which saw a dip of 13 per cent in the previous month.
According to Society of Indian Automobile Manufacturers (SIAM) the demand for cars in the local market has remained weak and the yearly statics might negative throughout the financial year. Sugato Sen, the Deputy Director General for SIAM told "Passenger car sales have been falling since last November. There has been no fundamental change in the economy that would improve sentiments in the domestic market. We would be reviewing our full-year forecast in October and going by the grim economic scenario, sales are expected to remain negative for the 2014 fiscal." The prominent auto industry body had speculated that during April 2014 the sales of passenger cars might increase by 3 to 5 per cent in April 2013 but during the month of July, that growth rate diminished.
The strategy adopted by major auto companies of launching newer products in the Indian car market has seemed to worked well from them. Brands like Ford India and Honda have benefited the most from this policy as the sales of their cars remaining at a stable state. On other hand, car manufacturers like Mahindra & Mahindra, Ford, Tata Motors and Toyota Kirloskar Motors registered a slight fall in the fortunes with demand for their cars remaining negative throughout the month.
Commenting on this development Puneet Gupta (Associate Director at IHS Automotive Sales Forecast) said "After nine months of decline, the automotive market has finally observed some positive growth. However, there is not much to read into this small upward shift. Production has grown by 15 per cent, as there was a strike at a Maruti plant during August last year. There is still a negative sentiment dominating this market due to increasing oil prices, hike in car prices and weak economy. But with the festive season around the corner, it is expected that the automotive sector will gain some momentum in the next 3-4 months."
Industry experts believe that the sales of passenger vehicles shall continued to remain subdued due to the ongoing issues with the economy. According to them, the weak performance of the economy paired with high interest rates and inflation has left a mark on the domestic demand for passenger cars in India as the consumer sentiment has declined on purchasing new vehicles.
