Running water over auto cos’ expectations to witness some surge post excise duty cuts, domestic sales continued to show signs of abatement in April 2014. Sales report for the month of April shows steepest fall in monthly sales in a year with a drop in sales by 10.15 per cent. SIAM has released data for domestic car sales for the month of April, the sales figure show that collective sales of passenger vehicles stood at 135,433 units in April 2014, lagging behind by15304 units as against 150,737 units sold in March 2014.
In May 2013, auto industry witnessed 11.7 per cent drop in sales. Auto makers have been offering lucrative cash discounts and benefits to lure customers to showrooms, most of the auto makers also extended excise duty cut benefits across its line-up or selected models. However, the low sales volume reported last month indicates at unwilling customer sentiment resulting in continual loss in monthly sales.
Though some of the car makers did show signs of growth, however some suffered on domestic front but performed well on export front. India’s largest car maker MSI, reported 12.6 per cent fall in domestic sales, on the contrary exports grew by 4.4 per cent, similarly home grown auto maker M&M registered 13 per cent drop in sales and 42 per cent increase in exports last month. Hyundai Motors and Ford on the other hand posted positive sales number in April.
The industry is awaiting election results to be announced, it is being believed that with the formation of new Government in India economy will grow resulting in improved customer sentiment. High interest rates for car loans, rising fuel prices and ever increasing inflation are the vital culprits behind sluggish growth rate of 4 to 5 per cent in domestic market. Aplenty enquires are being made but these are not converting into sales. In order to thrive, the automotive industry needs to grow with a tad faster rate.
