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2013: Car makers haven't seen such a bad year in a long, long time
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  • 2013: Car makers haven't seen such a bad year in a long, long time

2013: Car makers haven't seen such a bad year in a long, long time

FP Editors • December 21, 2014, 01:38:11 IST
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According to data provided by the Society of Indian Automobile Manufacturers (SIAM), car dispatches (which means factory to dealers) declined for the first time in 11 years in 2013 by almost 10 percent.

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2013: Car makers haven't seen such a bad year in a long, long time

Idling manufacturing plants, forced holidays for shopfloor workers, mounting inventories - 2013 was one of the worst years for Indian car makers. Over the last 18 months, there were only five months when even car production increased; for 13 of these 18 months production also had to be curtailed as sales declined. The earlier euphoria over two wheeler sales spurt is also subsiding. Now, as rural demand tapers, sales growth of bikes and scooters is already down to low single digits and unless buying in the hinterland picks up in the next few months after the harvest season, even two wheelers will be in a sorry state. Big trucks and buses are already down in the dumps as industrial activity has been diminishing for many months now.

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All in all, 2013 has been a forgettable year for the Indian automobile industry. Exports have not been kind either with most European markets in a slump. In fact, India, France and Japan are among the top 10 automobile markets in the world where passenger vehicle sales decline was the steepest in 2013 even as the UK, USA and China saw robust growth.

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[caption id=“attachment_1273817” align=“alignleft” width=“380”] ![Representational image. Reuters](https://images.firstpost.com/wp-content/uploads/2013/12/carsales.jpg) Representational image. Reuters[/caption]

According to data provided by the Society of Indian Automobile Manufacturers (SIAM), car dispatches (which means factory to dealers) declined for the first time in 11 years in 2013 by almost 10 percent to 18,07,011 units (19,98,703 units). Car makers are using every trick in their book to lure buyers to car showrooms. Hefty discounts on almost all (except a handful of models) passenger cars has been almost a norm last year though car companies did not hesitate in raising prices multiple times simultaneously.

SIAM says as many as 22 new cars were launched between April and Decmber 2013, during which time another 40 new variants of existing cars and another 10 model refreshes were also unleashed. Not to leave any stone unturned, car makers are lining up multiple launches in the upcoming Auto Expo too. Clearly though, discounts and new, jazzy cars have not enthused buyers.

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High car finance rates, continued inflation and steadily increasing fuel prices have all taken their toll. The interesting thing is that when ever people do buy cars, they now prefer to buy micro and mini cars of small four wheelers instead of the earlier craze for fuel guzzling SUVs.

Small cars are cheaper to own and get financed easily. As of December, car loans were available for anywhere between 11.4 percent to 14.6 percent rates of interest.

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But there is no immediate end to the automobile industry’s pain. It has not bottomed out yet, which means sales will continue to slide for some more months. Any recovery is now pushed to the second half of calendar 2014.

In December, domestic car dispatches declined 4.52 percent to 1,32,561 units (1,38,835 units). Maruti Suzuki India dispatched 6.4 percent more cars at 73,155 units (68,729 units); Hyundai Motor India sent 6.2 percent more at 28,320 units (26,651 units) but Tata Motors continued to slide with sales crashing by close to half or 41.92 percent at 6,537 units (11,257 units). So Tata dispatched less than a tenth of market leader Maruti!

Honda Siel Cars dispatched almost 30 percent more at 5,484 units (4,242 units) but Mahindra & Mahindra saw dispatched fall by close to 30 percent or by 26.93 percent to 15,881 units (21,735 units).

Not just cars, even motorcycle dispatches declined by 4.24 percent to 8,08,281 units (8,44,046 units). Total two-wheeler dispatches grew by just 2.32 percent in December to 11,63,465 units (11,37,081 units). Total commercial vehicle dispatches were down by a fourth or 25.53 percent to 46,757 units (62,786 units). In all, domestic vehicle dispatches fell 1.21 percent to 14,31,632 units (14,49,203 units).

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