7/27/2019 Literature Review Dh

1/3

Literature Review:

Car sales crashed to a negative in 2012-13, the fall coming after a decade, as the

slowing economy and continuance of high interest rates kept buyer sentiment at its lowest.

The industry is already worried as frequent production cuts and halt in investments are raising

doubts over the earlier perception of India being one of the biggest-potential car markets in

the world.

Demand for new cars has remained weak for most parts of the fiscal, and March did

not prove to be any different. The fall in March will be the fifth straight month of decline for

the car industry. Maruti, Hyundai and Tata Motors among the country's top auto makers

all finished March with negative volumes (year-on-year) and the industry is pinning hopes on

new launches like Honda Amaze sedan and Ford Eco Sport SUV for incremental numbers.

The last time the Indian car market was in the red was in 2002-03 when it fell by

2.1%. The fall in 2012-13 will be even sharper as the contraction has been much more now,

sources said.

While Maruti saw numbers slip by 4% at 1.07 lakh units, Hyundai, the country's

second-biggest maker, saw domestic market numbers go down by 14%. Tata Motors also

continued to stay in troubled waters as its passenger vehicle volumes crashed by 67% in

March (at 12,347 units). For the second month in a row, Tata Motors once the second-

biggest passenger vehicle maker of the countrylagged Toyota in overall volumes.

High interest rates and slowing economy have been the biggest dampeners for the car

market. The spurt in fuel prices has only added to the woes of buyers who have remained

away from the market for most part of the fiscal year.

"The slowdown of economy is impacting vehicle sales. Against the large base of last

year, there was a sharp drop in conversion of enquiries in the absence of any positive

stimulus and sentiments. We foresee the pressure on volumes to continue till there is

significant improvement in macro- economic factors," said Rakesh Srivastava, VP (Sales and

Marketing) at Hyundai India.

Companies say that the market is expected to remain edgy over the coming months

too and any improvement can be expected only when the RBI goes for a significant cut in

interest rates or the economy shows some concrete signs of improvement.

7/27/2019 Literature Review Dh

2/3

The change in the sales of different car manufacturer is as below:

As shown in above information all the car manufacturer we have selected have

decrease in their sales volume as compare to the previous year sales.

There is pressure at retail outlets as people stay away from new buys even as dealers

and companies are offering lucrative discounts and attractive offers. "There has been a drop

in walk-ins at showrooms and conversion to sales (of inquiries) are taking time. Overall, there

is a problem," said Kamal K Kumar, COO of Competent Motors, one of Maruti's top dealer

in Delhi.

Car sales in India fell for the first time in a decade - down 6.69 per cent in 2012-13

as the automobile industry struggled to cope with demand slump due to a sluggish economy.

According to the data released by Society of Indian Automobile Manufacturers

(SIAM), passenger car sales in the last fiscal stood at 18,95,471 units, compared to 20,31,306

units in the previous fiscal. This is the first annual decline since 2002-03, when car sales had

dropped 2.09 per cent.

The decline in passenger car sales last fiscal was also the steepest in the past 12 years

when the segment declined by 7.73 per cent in 2000-01.

"The overall economic growth was not so encouraging in last fiscal. Higher cost of

ownership impacted car sales. Also negative sentiments, particularly among lower- end

customers, have resulted in fall of sales," SIAM President S Sandilya told reporters here.

7/27/2019 Literature Review Dh

3/3

High interest rates, which ranged around 11-15 per cent, and high fuel prices, mainly that of

petrol, also impacted car sales during the last fiscal, he added.

In 2012-13, market leader Maruti Suzuki's sales went up marginally to 8,61,337 units,

while rival Hyundai Motor's saw a fall of 1.12 per cent at 3,82,851 units. Tata Motors' car

sales dipped by 32.28 per cent to 1,74,692 units, SIAM said.