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Auto makers stare at full-year decline

autos Updated: Feb 12, 2013 16:40 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Domestic passenger car sales fell by 12.45% at 173,420 units in January, the third consecutive decline monthly, raising chances of the industry recording a fall in sales in a fiscal for the first time in over a decade.

Car makers are now waiting for sops like reduction in excise duties and introduction of special schemes in the upcoming annual budget later this month.

A decline in sales may finally take the sheen off India's shining automobile market. Already, a number of manufacturers have put their investment plans on hold and may ultimately not invest at all if demand worsens.

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"The overall economic situation is low and consumer sentiments are deeply negative despite the recent notional rate cuts by the Reserve Bank of India (RBI)," said Vishnu Mathur, director-general, Society of Indian Automobile Manufacturers (SIAM). "If things don't improve, there maybe an actual slowdown in investments in the sector."

Car sales are down 1.8% this year so far and needs a miracle or a very generous budget to record a growth by the end of March. It looks set to miss SIAM's own target of 0-1% growth rate for current fiscal.

The sale of passenger vehicles declined by 4.62% in January. The only saviour was two wheelers whose sales grew by 8.5% during the month, helping a 5.3% growth in overall auto sale.