The Indian automotive industry annual car sales fell for the first time in a decade in the just ended financial year. India was seen as the second greatest car market globally, after China. However, with prolonged slow economic growth, high interest rates and rising fuel prices bought the Indian auto market in a downward trend.
For global auto majors like Ford Motor Co and Volkswagen AG, quitting is not an option from a market with huge population, rise in income level and enormous growth potential. R.C. Bhargava, chairman of market leader Maruti Suzuki told Reuters, "The industry, like the rest of the economy, has slowed down very substantially."
The small segment performance has been sluggish while the SUV car market seems quite bright for some automakers. Bhargava added "Everybody has to consolidate their operations, look how to manage with less, do more with less ... This recessionary period will force people to be more efficient."
Car sales are down by 4.6 percent in the first 11 months of the financial year that ended in March, 2013. Last year, car sales figure grew by 2.2 percent in India and sales are forecasted to be low in 2013. Rakesh Srivastava, senior vice president of Hyundai Motor Co's Indian unit commented, "In the absence of any positive stimulus and sentiments ... We foresee the pressure on volumes to continue until there is significant improvement in macro-economic factors.”
Most of the major auto players have seen sales volumes fall as much as by 20 percent.