A forgettable 2013 notwithstanding, the new year will see a deluge of new cars. Almost two dozen new cars are expected to be launched in 2014 as manufacturers seek to shrug off the slugishness of the market.
The jamboree will begin in the first week itself, when the new Honda City diesel and Mercedes S class are launched.
Other cars to be launched during the year include a compact sedan based on Hyundai’s small car Grand i10, Datsun’s small car GO, Honda’s seven-seater MUV Mobilio, Audi’s entry-level car A3 sedan, Chrysler Jeep, a new Skoda Superb, Maruti SX4, Tata Nano diesel and Mercedes GLA, a compact SUV, and its CLA sedan.
The industry hopes that the deluge will bring customers back to showrooms. In the last financial year, passenger car sales declined for the first time in 10 years with a 6.7% fall for the full year. Things have not improved this year either.
Sales have declined by 5% between April and November, and the industry is poised to register another annual dip in 2013-14.
“This year has been the worst for the industry. Sales have declined in 11 out of 12 months,” said Rakesh Srivastava, senior vice-president, marketing and sales, Hyundai Motor India Ltd. “It cannot get any worse than this. I am hopeful that after the elections the economy will start looking up, investment decisions would be taken and the wheel would start turning again.”
Traditional wisdom suggests that launching a new car in a sluggish market has its pitfalls. But the success of cars such as Honda Amaze, Ford EcoSport and Grand i10 this year has given hope to the industry.
“New cars will add to the excitement but I do not expect dramatic growth. It would probably be a low single-digit growth,” said Srivastava.
Ajay Raghuvanshi, vice president business management, Nissan Motor India, put it differently: “I do not think the market is down, only the sentiment is down,” he said. “People have money, it is just that there is no urge to spend.”
According to him, this is a temporary phenomenon, restricted to cities. “In rural India there is no slowdown,” he said. “We will launch the Datsun Go next year and 65% of its sales will be in non-metro centres. We are confident it will do well.”
This year, bottomlines were impacted by currency fluctuation in the middle of the year that made imported components expensive. At the same time, the companies were forced to give high discounts to move stocks.
“We have discounted the next year for growth as well,” said Sandeep Singh, deputy MD and COO, Toyota Kirloskar Motor Ltd. “That would mean we would have lost 3 years in a row.”