NEW DELHI: Car sales
may make a slow recovery this fiscal after a poor run in 2012-13 where
volumes fell for the first time in a decade, pulled down by poor
economic activity and high interest rates. Society of Indian Automobile
Manufacturers (Siam), the industry lobby group, forecasted a 3-5% growth
in car sales in 2013-14 after a 7% decline last fiscal.
In 2002-03, car sales fell 2%. Last fiscal's fall was the sharpest
since an 8% decline in 2000- 01. TOI had, in its April 2 edition,
reported first time that 2012-13 car sales set to fall after a decade. Siam
said buyers may return to the market this fiscal as there may be some
improvement in economic growth and interest rates may also soften from
their current highs. New models are expected to add incremental volumes
in a year of low base. However, the industry body — that had to
downgrade its forecast three times last fiscal — remains cautious.
"Overall, the sentiment continues to remain weak," S Sandilya, Siam's
president said. "Economic growth is still not very encouraging.
Inflation is still not under control. Fuel prices have increased
significantly."
Indications from the market also remain weak.
Discounts have been at an all-time high and dealers are managing heavy
inventory at a time when companies cut output in factories. Sales fell
22.5% in March.
LOKESH CHOUDHARY
PGDM 2ND SEM
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