After enduring a prolonged period of fall in sales, things are finally looking bright for Indian auto makers. The Indian auto market managed to enter the positive growth territory after nine months, witnessing an increase of 15.37 per cent in the month of August. Some industry experts believe that these statistics are positive signs for the Indian car market and would boost its hopes to do well in the upcoming festive season. Maruti Suzuki, the country's largest passenger car maker, has lead this resurgence, clocking a growth of around 52.7 per cent in the month of August. However, a major reason for such a high year-on growth is the conflict that took place at Maruti Suzuki's plant last year. Violent protests from the labour union led to the death of a senior official from the firm and subsequently, forcing the firm to endure a lockout for a month's time. According to statistics, the Indian car market sold 133486 cars in the month of August this year, which is much higher in comparison to the corresponding period last year, wherein sales were 115705 units.
Maruti Suzuki has witnessed growth in the month of August 2013 along with Honda and Ford, which have benefited from the performance of the Amaze and EcoSport, respectively. However, there are several companies that have recorded negative statistics for August 2013, depicting the state of the market. The firms that have witnessed a fall in the month of August includes big players like Tata Motors, Mahindra & Mahindra and Toyota Kirloskar Motors.
Industry experts believe that the performance of Maruti Suzuki has had a big role to play in the bringing back the auto market into the positive growth territory. Auto makers have been battling slow demand, economic crisis, rising cost inputs and high fuel prices for a long time now. Due to this, buyers have become highly reluctant and are refraining from purchasing new vehicles. Despite the overall growth, some segments saw a drop in the sales for the month of August in 2013, which includes utility vehicles (13 per cent fall) and vans. Although the festive season is approaching, one can still sense caution in the tone of prominent officials from the industry, who are still sceptical about any substantial progress taking place. Reports from Society of Indian Automobile Manufacturers (SIAM), the industry body, had predicted a growth of 3 to 5 per cent in the current fiscal year in a report released in April. However, after seeing no improvement, SIAM revised the predicted growth in the July report.
Sugato Sen, the Deputy Director General of SIAM, spoke on the same situation in a recent interview. "Passenger car sales have been falling since last November. There has been no fundamental change in the economy that would improve sentiments in the domestic market. We would be reviewing our full-year forecast in October and going by the grim economic scenario, sales are expected to remain negative for the 2014 fiscal," he was quoted as saying.
Despite mixed responses from people from the industry, analysts are hoping for a good time in the coming future. The growth in the month of August has boosted the prospects of the stock market as well. Some experts feel that auto makers should continuously work towards improving things and hope for a revival in the festive season. An official from a market research and forecast firm spoke about the same issue. "After nine months of decline, the automotive market has finally observed some positive growth. However, there is not much to read into this small upward shift. Production has grown by 15 per cent, as there was a strike at a Maruti plant during August last year. There is still a negative sentiment dominating this market due to increasing oil prices, hike in car prices and weak economy. But with the festive season around the corner, it is expected that the automotive sector will gain some momentum in the next 3-4 months," the person was quoted as saying.
