Motown sales fall 10% in 2013

India’s car market ended 2013 as one of its worst years with a 10% fall in sales, the first annual decline in 11 years. With rising fuel prices and sticky inflation, which keeps borrowing costs high, the industry doesn’t see any signs of an immediate recovery. Car sales, an indicator of consumer demand and the country’s macroeconomic conditions, remained sluggish with 1,91,692 fewer units sold in 2013 compared with the previous year. According to data from the Society of Indian Automobile Manufacturers (SIAM), India’s domestic car sales last year totalled 18,07,011 units.
Year-over-year car sales in India have fallen in 14 of the past 17 months as a slowdown in the economy, as well as the central bank’s decision to keep interest rates high to tackle inflation and periodic increases in fuel prices have kept many potential customers away. SIAM expects the sombre mood to continue for some more time.

Analysts tracking the industry also echoed similar sentiments. Any revival or turnaround can only be expected in the second half of 2014, possibly after the outcome of the general elections, they say.Amid the gloom, the only saving grace was the two-wheelers segment, which posted a 4% expansion in 2013 on the back of strong rural markets and bullish demand for scooters in urban areas. The sales of two-wheeler units, in fact, lifted the overall auto industry sales into the positive territory. The commercial vehicles market continued its downhill journey, with sales falling 26% to 46,757 units in December. The segment has now posted lower sales every month in the past two years. SIAM executives portrayed a weak picture for the trucks and buses market, which is considered a barometer for economic activity.
The industry is pinning its hopes on the biennial Auto Expo that will see 70 new vehicles making debut for Indian customers. Some of these models will be launched immediately. According to SIAM, since April, 22 new car models, 40 new variants and 10 refreshed models were launched, generating consumer excitement. New models like Honda Amaze and Ford EcoSport continue to enjoy strong demand.