Chennai, Dec 26: A combination of things – the final economic holdup, high interest rates and increasing fuel costs – affected the Indian industry to a large extent, leading to a slide in sales volumes this year.
There were but exceptions just like the scooter and tractor sectors that bucked the final downward trend, trade officers and analysis analysts said.
“In a way, it’s ironical that the Indian industry is on the one hand witnessing new OEMs increasing investments and new automobile launches and on the other hand experiencing a decline in sales,” Kenichiro Yomura, president, Nisan India Operations.
At a time once the market was low, another Japanese company Isuzu Motors, whereas launching its SUV, aforesaid it might invest around Rs.3,000 crore ($485 million) in a factory in Andhra Pradesh.
“The past year has been extremely difficult for the auto sector because the general economic and shopper sentiments have did not obtain from last year,” P. Balendran, vice president, General Motors India.
“Despite a slew of latest product launches, the optimism and vibrancy within the market is totally missing. With the unfavorable macro-economic headwinds like high interest rates, high fuel costs and inflation still looming massive, the market is unlikely to select up presently,” he foreseen.
On high of this, the rise in excise duty on sports utility vehicles to thirty p.c has severely wedged the quick growing segment.
According to Balendran, even sales of diesel models, thought of the backbone of the trade, are currently waning away.
“The auto segments are growing in India with additional fuel-efficient products touching the market. On the opposite hand, the lower hatchback phase has shown de-growth as 1st time consumers are shying off from showrooms owing to the high price of purchase, big-ticket loans and high fuel costs. Even high-end premium saloons area unit showing negative trends,” Balendran remarked.
According to trade body Society of Indian cars makers (SIAM), the sales of traveller vehicles declined by 5.34 % throughout April-November 2013 over the same amount last year.
“Within the traveller vehicle phase, cars, utility vehicles and vans born by 4.97 percent, 3.62 % and 12.23 % severally throughout April-November 2013 compared to the same amount last year,” Thailand aforesaid.
The other sector that got hit the worst was the industrial vehicles phase.
“Last year, junction rectifier by LCV sales, the industrial vehicles phase showed growth. however this year the LCV phase itself is down,” Yaresh Kothari, analysis analyst at Angel Broking.
According to him, freight rates remained flat or maybe declined whereas the diesel costs went up, feeding into the revenues of economic vehicle operators and therefore delaying the acquisition of latest vehicles.
Kothari aforesaid that in Jan-Nov 2013, industrial vehicle sales went right down to 691,840 units from 859,701 units within the comparable amount the previous year.
Within the two-wheeler sector, the scooter phase logged smart growth owing to the inflated capacities that met the confined up demand.
According to Kothari, between Jan and Nov 2013 scooter sales totalled 3,123,322 units – up from 2,992,658 units logged throughout the comparable amount within the previous year.
Two-wheelers registered growth of 5.78 % throughout April-November 2013 over April-November 2012. inside the phase, scooters and motorcycles grew at 18.70 % and 3.32 % severally, whereas mopeds declined by 10.49 percent, SIAM said.
Kothari aforesaid sales in rural areas gained smart traction throughout the amount beneath review.
“Companies with an intensive distribution network gained because of that,” he added.
According to Kothari, the rupee’s depreciation enabled vehicle exporters increase their shipments and conjointly their bottom lines.
During April-November 2013, overall automobile exports grew by 5.52 percent.
Passenger vehicles, three-wheelers and two-wheelers registered growth at 9.64 percent, 16.98 % and 3.41 % severally, whereas industrial vehicles declined by 12.31 % throughout April-November 2013 compared to the same amount last year, SIAM said.
The year simply ending conjointly saw major vehicle remembers by Ford India and General Motors.
Ford India, the Indian subsidiary of american automobile large Ford Motor Company, declared the recall of 166,021 of its Figo and Classic automobile models to examine and rectify issues within the rear twist beam and also the power steering hose.
The problem for the opposite american company, General Motors India, was abundant bigger as it not solely recalled around 114,000 units of its multi-purpose vehicle Tavera to arranged emission and specification problems conjointly had to face a government probe.
The company conjointly sent home many senior executives on this count.
Terming the present depressed sentiment as a short lived development, Nissan’s Yomura said: “While parts like rising input prices and interest rates, the unstable rupee and unsteady fuel costs are primarily harmful to the health of India’s economy, as well as the auto trade, the colorful political landscape is additionally a big contributor to shopper sentiment. With (general) elections turning out in 2014, it’ll be interesting to ascertain however things change.”
He aforesaid there’s scope for more growth within the sub-B and B segments, and also the compact SUV phase has around begun rising.
“In 2014, we’ll launch the Datsun whole, whose target customers are 50 % of the entire trade volume and that can not be coated by Nisan whole,” Yomura aforesaid.
“With the auto trade troubled for the last 24 months, we were expecting a information package within the last budget. Going forward, we expect the govt. to supply a information package in next year’s budget within the form of excise duties back to the 2008-09 levels for any hopes of revival,” Balendran aforesaid.
“We expect the market to show around solely once a stable government is in place at the centre once the elections. Therefore, any signs of a circle are expected to be seen solely throughout the last half of next year,” Balendran further.
