Fiscal 2014 has not been good for the India car market in terms of sales. Although the entire country has been affected by the slump in the Indian car market, western region has suffered the most. Maharashtra, Goa, Madhya Pradesh and Chhattisgarh are the states that have experienced the most drastic downfall in terms of sales. Experts from the industry have claimed that one of the main reasons for this slump is the fall in the earnings from the stock market in western India. Statistics suggest that the western part of India saw a fall of 9 per cent in sales between April-July (2013), which is 2 per cent more than the overall decline in the entire country.
Mayank Pareek, Chief Operating Officer for Marketing and Sales at Maruti Suzuki, talked about the situation in a recent interview, explaining the possible reason for this decline. "Western markets have taken the sharpest hit in sales. The customers here are financially savvy, so they are prudently postponing their fresh purchases in the light of turmoil in the stock market and the changing financial scenario," he was quoted as saying.
This decline in the western region of the country has come as a surprise to a lot of analysts. According to statistical data, the region has a one-third share in cars sold all over the country. Also, the western region of India has been the fastest growing and largest automobile market in the past few years. Reports from Society of Indian Automobile Manufacturers (SIAM) have claimed that in terms of sales, western markets lead the charge in the Indian car market till the month of March, 2013. This growth was mainly attributed to the demand from urban areas of Gujarat and Maharashtra along with the rural sector from Madhya Pradesh. Additionally, the mining sector present in the states of Goa and Chhattisgarh had contributed to the demand.
However, states in this region have been severely affected by the constant decline in the value of the rupee and the blow that has dealt to the market. In addition, a few parts of west India have suffered from droughts for long periods, something that has taken a big toll on the people. Industry experts believe that these trends are likely to continue in coming times as the situation is not showing any signs of improvement.
A source close to this development claimed that Maharashtra and Gujarat, which are major financial centres of this region, have suffered, resulting in fall in earnings made by the corporate market and an unstable stock market. Rakesh Srivastava, Senior Vice-President for Sales at Hyundai Motor India, spoke about how the financial crisis has affected these states. "The grim economic scenario has been the biggest drawback for this region. There are certain pockets like Surat, where the diamond trade has seen a severe slump, while the ban on mining activity in Goa and Chhattisgarh has taken its toll on new car purchases," he said.
