Car sales are headed for their first crash in a decade as poor buyer sentiment and adverse economic factors have hit demand badly. The market is feared to be moving towards a negative growth this fiscal, the first since 2002-03, and the going is expected to be tough even in the next fiscal.
Industry body Society of Indian Automobile Manufacturers (Siam), which had downgraded the growth estimate for 2012-13 to 0-1% in January from the 10-12% it had forecasted at the beginning of the fiscal, said that even the current estimates may not hold firm.
The economic slowdown and its resultant effect on the corporate sector is one of the major reasons behind the despondent mood among buyers. High interest rates and rising petrol prices had already hit the industry badly. Traffic at car showrooms remains thin and sales are increasingly getting difficult to come by. The worrying reality for the car makers is that the volumes are not picking up despite attractive discounts.
The start of 2013 was disappointing for the car makers as industry volumes fell 12% in January at 1.73 lakh units against 1.98 lakh units in the same month last year. Tata Motors, Ford, General Motors, Nissan, Skoda and Toyota all witnessed volumes in the negative. Sales in the April-January ’12-13 period are down 2%.
Industry officials say that conditions continue to remain tough and are not expected to turn around fast.
Maruti has also spoken about similar pressures and said demand is expected to remain weak.
General Motors, that launched a new entry sedan Sail, is also not very bullish.
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