Weighed down by the slow economic growth and high interest rates, car sales in 2014 fell below the numbers sold even in 2010, highlighting the depression in the Indian car market, once seen as the brightest spot in the global automotive space.
A total of 18.51 lakh cars were sold in the domestic market in 2014, lower than the 18.67 lakh units that were sold in 2010. This despite the fact that a number of new models have hit the market in the last four years and a relatively younger population is among those hitting the showrooms.
The only silver lining in the depressing report card is that sales in 2014 have grown 2% when compared to the volumes achieved in the previous year (2013). In fact, the volumes had peaked to a record 19.98 lakh units in 2012 when demand was at its best, boosted by the sweeteners thrown in by the previous Congress-led UPA government.
Going ahead, sales outlook in the new year look even worse as car prices have moved up substantially and vehicle financing continues to remain expensive. The fall in India's fortunes now looks even bleaker if one considers the numbers sold in China over the same period. China, which is already the world's largest car market, saw sales of passenger vehicles grow from 1.38 crore units in 2010 to 1.89 crore units last year, according to figures provided by China Passenger Car Association.
The poor run of the Indian car market has also seen some of the relatively new investments go sour. Europe's top carmaker Volkswagen, which started a new factory in India in 2010 amidst much fanfare, has failed to take off meaningfully . The company has drastically cut its 2018 group market share target for India to a single digit from the high 18% targeted earlier.
Volumes in scooters and motorcycles have, however, moved up between 2010 and 2014 though commercial vehicles have also come down due to the economic slowdown.