Car sales fall 5-7% in December, revival in 2014 unlikely

Automobile sales during the year 2013 ran out of gas as low market sentiments, high interest rates and a depreciating economy played spoil sport. Except Maruti, Hyundai and Honda, all other major car makers registered negative growth.

Sales during December 2013 fell by 5 to 7%, from 1.94 lakh units sold in December 2012 to 1.80 to 1.84 lakh units sold in December 2013. This was despite the fact that most automakers offered a host of discounts, offers and freebies to attract customers into showrooms prior to price hikes to come into effect from January 2014.

Car sales fall 5-7 percent in December, revival in 2014 unlikely

It was only Maruti Suzuki and Hyundai Motors that managed single digit growth during the past month and this scenario is likely to continue through 2014 or at least till 2014 General Elections. Other auto makers in the country, such as M&M, Ford India, Toyota Kirloskar and General Motors all posted losses during December to the tune of 27.78, 9.91, 11.78, and 19.27% respectively.

Maruti Suzuki has said that the company will go slow on new investments in their plant in Gujarat while Hyundai is planning strong initiatives in rural areas and exchange sales so as to increase market share in the New Year.

Society of Indian Automobile Manufacturers (SIAM), the apex Industry body representing 44 leading vehicle and vehicular engine manufacturers have already cited fears that car sales are headed for a fall in 2014 as well making it the second year in running of declines. The body has sought a revival package from the government for lower excise duties and incentives for scrapping of older vehicles which they feel would play a major role to boost demand.