The trauma of passenger car sales in the Indian automobile market continues to persist in the agony of declining sales. Good hopes in the form of positive streak, as brought forth by August and September 2013, have been snapped to gloomy figures in October as the car market still reels under weak macro-economic conditions prevalent in the country. Furthermore, to thrust a final blow, now there are predictions from the industry experts that the situation is not going to improve much and the fiscal year 2014 is likely to see consistent dip in car sales. Simply put, passenger car sales in the country are expected to decline further in this current financial year that ends in March 2014.
Notably, passenger car sales have suffered due to high interest rates and fair contribution from a slowing economy. As an effect, this has decisively forced domestic customers to curb their car-buying instincts and thus, delay their purchase orders. As predicted by experts and analysts, the fiscal year is going to mark a second straight year of decline in passenger car sales.
As per monthly report for October 2013, the sale numbers are not healthy and one can see a dip of 3.9 per cent from a year earlier. The sale statistics revealed by the Society of Indian Automobile Manufacturers (SIAM) show that 163199 units were sold in October 2013 as against 169788 units in October 2012.
Earlier, there was a feeling that the onset of festive season would bring relief to the woes of car makers in the country. However, on the contrary, odds are certainly not favouring car makers to relish and feel good about with a decline of 3.9 per cent. Vishnu Mathur, SIAM Director-General, expressing his concerns, said, “We continue to see a decline in car sales. In today's economic scenario of high inflation and interest rates, the middle class (the major customers of cars) is the worst hit.” He added that the positive streak as seen by auto industry was backed by increased rural demand, owing much to a good monsoon. This resulted in traction of small cars. Mathur also stated, “This is the only reason for the moderation in decline in car sales, otherwise the slide would have been much steeper.”
Notably, SIAM earlier had forecasted in April that car sales will see a growth of 3-5 per cent this year. But, as sales report highlight, in coming months car sales may fall instead. Mathur said, “Car sales had declined continuously in the first nine months of the year.” On similar lines, he added, “Now the decline is moderating, so if it keeps on moderating at this pace maybe we'll see zero growth in January-February.” Mathur's comment 'Definitely the year will be negative' shows that car makers should not expect any respite in this fiscal.
Notably, such a negative impact is shared by many factors, directly or indirectly. The Indian economy is inching up at its slowest pace in a decade. Meagre urban salary hikes coupled with high interest rates and soaring fuel costs have all contributed to dimming passenger car sales. As such, it is no surprise that some industry analysts have pushed back the idea of sustaining a recovery to the next fiscal year.
