It seems that the automotive industry that had been under the grip of slump has finally seen a ray of hope as collective sales of passenger vehicles and utility vehicles saw positive growth for the first time in nine months. Car makers in India sold a total of 207,000 units of passenger vehicles, up by 2.7 per cent as compared to the same time period last year. In August 2013, domestic market registered hike after witnessing a long period of low monthly sales. Various factors including high interest rates, inflation, depreciation of rupee contributed towards low customer sentiment hence resulting in snail paced monthly sales.
Auto pundits are hopeful that Indian automotive industry has come out of its bad phase and in future it will continue to post rise in sales. Car sales grew by 3.08 per cent at 148,000 units, two wheeler sales also improved in May showing signs of recovery at 1.4 million units up by 16.30 per cent. Industry insiders are of the opinion that the slashed excise duty proposed during the interim budget in February by former FM has finally reaped results for auto makers in India. On the contrary it is also being said at the same time that this could not be taken as the signs of recouping.
With the new government in effect, India will soon get the new budget. Auto sector is hopeful that Modi government will lend a helping hand by showing leniency towards the auto sector during budget. The last fiscal that ended on March 31 ended on a bad note with auto sales declining by 3.53 per cent with 18.4 million vehicles sold in FY 2013-2014.
No positive growth has been witnessed on the economy of the country for a long time which directly affects the slowdown in auto sector. Adding to the woes of domestic slump, the upcoming monsoon season has made auto makers worrying as there could be a fall in demand during the season. However the However, the government is working towards a contingency plan for the monsoon season.
