The Telegraph
Friday , April 11 , 2014
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Car sales down for 2nd year running; job loss seen at 1.5 lakh

New Delhi, Apr 11 (PTI): Car sales in India fell for the second consecutive year in 2013-14 as the industry struggled for traction in a sluggish economy. Even exports were flat.

The job losses – from raw materials to dealerships – could be up to 1.5 lakh.

The Society of Indian Automobile Manufacturers (SIAM) said domestic car sales in the year to March 31, 2014, added up to 17,86,899 units as compared to 18,74,055 units in the previous fiscal.

In 2013-14, car sales fell by 4.65 per cent on the previous year. In 2012-13, car sales had fallen by 6.69 per cent in the first decline in a decade.

“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,” SIAM President Vikram Kirloskar told reporters here.

He said the decline in auto sales hit the industry hard and employment, mainly of contract and temporary workers, has been affected.

”We at SIAM have not done a calculation of how much job losses were there, but I personally feel that across the entire value chain in the auto industry, from raw materials to dealerships, there could be around 1-1.5 lakh job losses,” Kirloskar said.

During the fiscal, total sales of vehicles across categories, however, were up 3.53 per cent in 2013-14 at 1,84,21,538 units as compared to 1,77,93,701 units in 2012-13, SIAM said.

Two-wheelers did well posting a growth of 7.31 per cent at 1,48,05,481 units as against 1,37,97,185 units in FY13.

Motorcycle sales in 2013-14 were 10,479,817 units as against 1,00,85,000 units in the previous year, up 3.91 per cent, SIAM said.

Scooters also posted a robust growth of 23.24 per cent during FY14 at 36,02,744 units as compared to 29,23,424 units in 2012-13.

Commercial vehicles, however, continued to reel under a prolonged slump, posting a decline of 20.23 per cent at 6,32,738 units as against 7,93,211 units in the earlier fiscal.

“The stalling of infrastructure development projects, ban in mining activities and overall slowdown in economy continued to hit the commercial vehicles segment,” Kirloskar said.

On the outlook for FY15, Kirloskar said the industry was ”hoping for a moderate growth or at least not to be in the negative territory”.

When asked about the expectations of the auto industry from the new government post elections, Kirloskar said: “We hope the excise duty cut will remain. In fact, there is room for further reduction in taxes as auto industry is one of the most taxed sectors.”

A growth-oriented policy that will spur manufacturing activities and overall economy to lift consumer sentiments will be crucial, he added.

On the export front, during 2013-14, car shipments were almost flat at 5,50,466 units as against 5,47,222 in the previous fiscal.

Overall auto exports from India grew by 7.21 per cent in 2013-14 to 31,07,893 units from 28,98,907 units in 2012-13.

SIAM said domestic passenger car sales declined to 1,71,489 units in March as compared to 1,80,675 units in the year-ago month.

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