Heavy discounts and election results have perked up volumes for the beleaguered car industry . As car makers try to drive out of the two-year slump in sales, the news of a stable government at the Centre has come as a positive change. While reluctant buyers seem to be coming back to the market, a full recovery , however, is still some months away .
While April had remained tough, sales numbers for May give a signal that a gradual turnaround could be on the way , although it may happen more towards the end of the year when the festive season kicks in.
Maruti, the country's biggest car maker, saw wholesale volumes (units dispatched from plants) go up 16% in May at 90,560 units against 77,821 units in the same month last year. Rival Hyundai also had a positive month as the company sold 36,205 units in May compared to 32,102 units in the same month last year, showing a growth of 13%.
The revival was led by new models like Xcent entry sedan and i10 Grand compact.
While a full turnaround is dismissed as “too early“ by industry analysts, most say the “direction now appears positive“ if the new government ushers in economic reforms and GDP picks up.
High interest rates, rising fuel prices and an uncertain economic climate were among the major reasons that had put brakes on the fast paced growth in the Indian car market. Volumes have remained negative over the last two years and some companies even decided to hold on to proposed investments.
The entry of a stable BJP-led NDA government is making the industry confident.
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