Annual car sales fall second year running

COSTS BITE Sluggish economy, interest rates and stubborn inflation kept consumers away from showrooms

NEW DELHI: Domestic passenger car sales in India fell for the second straight year in 2013-14, completely deflating what was once among the fastest growing car markets in the world.

Car sales fell by 4.65% during the year as a sluggish economy, high fuel costs, interest rates and stubborn inflation kept consumers away from showrooms. The prolonged slowdown in demand led to factories operating at low levels and an estimated loss of around 150,000 jobs across the sector.

The bad news does not end here as there are no signs of an imminent revival in demand. The excise duty cut announced by the government in February has not helped push sales.

“Last year was one of the most difficult years for the industry. The business environment was tough due to low growth of economy, high interest rates, fuel prices and low sentiments,” said Vikram Kirloskar, president, Society of Indian Automobile Manufacturers (SIAM).

“We hope it is the end of our winter of discontent, but it is only a hope. We’ve had continuous decline over the last two years,” he added.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic car sales during the financial year stood at 17,86,899 units, compared to 18,74,055 units sole during in the previous fiscal year. In 2012-13, car sales in India had fallen by 6.69% compared to 2011-12.

“We have not done a calcula- tion of how many jobs were cut, but I personally feel that across the entire value chain in the auto industry, from raw materials to dealerships, it could be around 100-150,000 jobs,” Kirloskar said.