NEW DELHI – Is India losing its shine in the global car market? Car sales crashed to a negative in 2012-13, the fall coming after a decade, as the slowing economy and continuance of high interest rates kept buyer sentiment at its lowest. The industry is already worried as frequent production cuts and halt in investments are raising doubts over the earlier perception of India being one of the biggest-potential car markets in the world.
Demand for new cars has remained weak for most parts of the fiscal, and March did not prove to be any different. The fall in March will be the fifth straight month of decline for the car industry. Maruti, Hyundai and Tata Motors — among the country’s top auto makers — all finished March with negative volumes (year-on-year) and the industry is pinning hopes on new launches like Honda Amaze sedan and Ford Eco Sport SUV for incremental numbers.
The last time the Indian car market was in the red was in 2002-03 when it fell by 2.1%. The fall in 2012-13 will be even sharper as the contraction has been much more now, sources said.
“A recovery is not coming anytime soon. The tough times will continue in the coming months,” a top official at one of the country’s leading car company, said while requesting anonymity.
While Maruti saw numbers slip by 4% at 1.07 lakh units, Hyundai, the country’s second-biggest maker, saw domestic market numbers go down by 14%. Tata Motors also continued to stay in troubled waters as its passenger vehicle volumes crashed by 67% in March (at 12,347 units). For the second month in a row, Tata Motors — once the second-biggest passenger vehicle maker of the country — lagged Toyota in overall volumes.
High interest rates and slowing economy have been the biggest dampeners for the car market. The spurt in fuel prices has only added to the woes of buyers who have remained away from the market for most part of the fiscal year.
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