Even as car sales in the country declined for the second year in a row by nearly 5 cent in 2013-14, industry body SIAM on Friday said, it was hopeful of slight recovery in the current fiscal in line with the expectation of an overall economic recovery and also some tax reliefs from the new government.
Domestic car sales in 2013-14 stood at 17.87 lakh units or 4.65 percent lower than the previous year, according to the data released by the Society of Indian Automobile Manufacturers (SIAM). In the 2012-13, car sales had dropped for the first time in a decade--by 6.69 percent.
For overall passenger vehicles segment (which included cars, utility vehicles and vans) the data shows a decline for the first time in a decade. The sales went down by 6.1 per cent during the year as a result of continued economic slowdown, weak consumer sentiments, rising fuel prices and high interest rates.
"Not fancy (car sales) growth but hopefully some moderate growth because there has been marginal improvement in GDP numbers in recent months," SIAM President Vikram Kirloskar said when asked about his outlook for the current fiscal. He, however, declined to project any growth numbers. He was speaking to reporters here after the release of the data.
Asked about the expectations of the industry from the new government, the SIAM President said, "Any new government that comes in will try to improve economic situation…we hope that a lot of knots that have come in the system are untied…we hope the excise duty cut will remain. There is room for further reduction in taxes as auto industry is one of the most taxed sectors."
Mr. Kirloskar explained that the budget's cut in excise duty on vehicles has not spurred sales growth as vehicles carrying the lower excise duties have just about begun entering dealer inventories and showrooms. So far, the stocks were those from before the duty cut was announced in February. Other factors keeping potential car buyers away are high interest rates on car loans and the sentiment of poor job security owing to the economic slowdown, he added.
Consultancy firm PriceWaterhouse said it expects the passenger vehicle to bounce back latest by the first quarter of 2015. "While there may not be a strong growth, it could witness a growth of 3 to 5 percent for the current fiscal year i.e FY15. Medium to Long term growth prospects of the industry i.e 2016 - 2020 continues to be bright," PriceWaterhouse Auto Expert and Partner Abdul Majeed said.
Rakesh Batra, Partner & National Leader - Automotive practice, EY said, "FY14 turned out to be a difficult year for the Indian Automotive industry."
Mr. Kirloskar added that the slowdown in the sector has also led to job losses in the industry. Siam has not calculated the quantum of job losses, he said, adding, "I personally feel that across the entire value chain in the auto industry, from raw materials to dealerships, there could be around 1-1.5 lakh job losses".
Additionally, Mr. Batra said auto manufacturers' bottomlines are under "severe pressure" on two accounts: low capacity utilization due to production cuts in face of low demand and heavy expenditure on marketing. "So even government's efforts to provide some respite to the sector by reduction in the excise duty in February this year has failed to attract many buyers in a market that is waiting to stabilize post the on-going polls," he said.
To beat slowdown, companies launched about 35 new cars in the market during the year besides introducing about 51 variant models. Introduction of new models normally entails heavy marketing costs.
As per the figures, commercial vehicles continued to reel under a prolonged slump, posting a decline of 20.23 per cent at 6.34 lakh units as against 7.93 lakh units in the earlier fiscal.
"Apart from the economic slowdown, CV demand has been negatively affected by a slowdown in industrial output, a gradual rise in diesel prices, a slowdown in new infrastructural projects, and a ban on mining in certain states," Mr. Batra said.
Two-wheelers, however, posted good growth of 7.31 per cent, helped by demand in rural areas, pushing total vehicles sales across categories during the year into the positive territory, lifting total vehicle sales by 3.53 per cent in 2013-14 to 1.84 crore units.
RELATED NEWS
March sales bring some consolation to vehicle makers
M&M, Honda, Tata looking to hike car prices
Auto industry grabs the lifeline
Cars are cheaper, cellphones dearer
Auto industry gets major relief
Auto industry slump continues; car sales drop 7.59% in Jan
via Business - Google News http://ift.tt/OQ25wy
Put the internet to work for you.
0 comments:
Post a Comment