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High inflation, a stagnant economy and costly finance continued to weigh on the domestic auto industry.
According to data released by the Society of Indian Automobile Manufacturers on Friday, domestic sales of automobiles during 2013-14 grew by 3.53 per cent over the same period last year thanks mainly to the two-wheeler category.
In FY14, domestic passenger car sales fell 4.65 per cent to 1,786,899 units, from 1,874,055 units sold in the same period last fiscal. The two-wheeler segment, however, registered a 7.31 per cent growth, with scooter and motorcycle sales growing 23.24 per cent and 3.91 per cent, respectively.
Difficult year
“Last year was difficult for the industry. We witnessed declining trends in every segment except two-wheelers. The economic growth is not encouraging. Inflation is still not under control and vehicle finance rates continue to be high. Commodity prices are also going up,” said Vikram Kirloskar, President, SIAM.
The industry is hopeful that things will improve after the general elections. The overall commercial vehicles segment saw sales drop of 20.23 per cent compared to the previous year. Sales of medium and heavy commercial vehicles segment fell 25.33 per cent and that of light commercial vehicles, by 17.62 per cent.
Automobile exports grew 7.21 per cent during the fiscal.
On the outlook for next year, Kirloskar said that he hopes GDP will improve. “There has been some improvement in GDP in the past six months. We expect moderate growth in domestic cars and utility vehicles segment.” Post polls, he expects the new Government to reduce taxes in the “highly overtaxed” automobile sector.
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