Vishnu Mathur, director-general, Society of Indian Automobile Manufacturers (Siam), said, "The decline in annual car sales that we witnessed in 2013 was the first time after 2002. The negative sentiment has deepened due to the current state of the economy."
Siam data show passenger car sales fell 9.6 per cent to 1,807,011 vehicles from 1,998,703 the previous year. A poor market has compelled companies to cut production of these 13 times over the past 18 months.
Demand was no better in the overall passenger vehicle (cars, utility vehicles and vans) and commercial vehicle segments - wholesale numbers dropped 7.2 per cent and 15.6 per cent, respectively. Siam said a revival in consumer sentiment and sales could only be expected in the second half of this year. "Some reforms have been initiated by the government. The tenders for buses under the JNNURM (Jawaharlal Nehru National Urban Renewal Mission) scheme have started coming out in some states. Mining activities have started to an extent and a few infrastructure projects are being fast-tracked. We hope what is happening today will culminate in sales in the second half of the year," Mathur said.
In April-December 2013, car makers launched 22 models, 40 variants and 10 model upgrades. However, while passenger vehicle sales in the period fell 5.7 per cent to 1.83 million units, the drop was sharper last month at nine per cent (186,161 vehicles).
While leaders Maruti Suzuki India and Hyundai Motor India managed to register a moderate increase in volumes, costlier fuel & finance and tighter lending norms, among other reasons, pulled down sales at Mahindra & Mahindra (M&M), Ford, General Motors and Toyota Kirloskar Motor during in December.
Total sales of commercial vehicles were down 25.5 per cent to 46,757 vehicles from 62,786 sold in the corresponding period last year.
Bucking the sector trend, sales of two-wheelers grew 2.3 per cent to 1,163,465 vehicles in December, largely because of a higher demand for scooters, sales of which grew 29.9 per cent to 301,714 vehicles during the month. Demand for motorcycles fell 4.2 per cent to 808,281 vehicles in the period.
Overall, sales of vehicles dropped 1.2 per cent to 1,431,632 in December against 1,449,203 in the year-ago period.