India’s car market is shadowed by dull sales figures reported by the top manufacturers in the country in the month of May. The reduced volume was the result of a massive hike in the tax tariffs and the rise in the price of the fuel which further affected the demand for the vehicles. While the domestic economy is growing at the slowest pace recorded in past nine years, the automotive companies are struggling to achieve the 10 per cent to 12 per cent growth target fixed by the local industry body.
Senior Director, Society of Indian Automobile Manufacturers (SIAM), Sugato Sen, quoted, "Things are not looking good." He further added, "We did not expect that sales would be so low. The economic sentiment is not positive." Notably, SIAM predicted that by the end of Fiscal Year ending in March 2013, the industry will attain 10 per cent to 12 per cent boost in its sales volume.
A sharp Year-on-Year (YoY) decline of 5.9 per cent in the passenger cars segment is reported by Maruti Suzuki. With 45 per cent of market share, Maruti Suzuki is the largest car manufacturer in the country. Ford and General Motors reported a decline in sales by 14 per cent and 27 per cent respectively. While another giant in the domestic market, Tata Motors, which is the third largest in terms of market share, witnessed a growth of 6 per cent.
The automotive industry was already slumping, owing to the increase in import costs due to massive hike in excise duty announced in federal budget of March and constant decline in value of rupee. Recent excessive hike in the price of petrol further increased the problems of the car makers. As compared to 9.2 per cent growth in the year 2011, Indian economy marked a growth of 5.3 per cent during the months of January till March in 2012.
Overseas car manufacturing giants like Ford, Nissan and Renault invested billions of dollars in the domestic market, after witnessing the 30 per cent increase in car sales during 2010-11. However, during the last fiscal, sales volume went down by 2.2 per cent due to the slow pace of economy. An increment of 27 per cent in its sales was reported by the largest Sports Utility Vehicle (SUV) and Jeep Manufacturer, Mahindra & Mahindra group. The leading car maker gives the whole credit of the success to its all diesel line up. Diesel vehicles contribute 40 per cent of the total new car sales in the country, with its demand having doubled over the last year. State subsidies which make diesel about 50 per cent cheaper than petrol is the main rea
