Car sales expected to marginally increase this fiscal

Car sales expected to marginally increase this fiscalAfter suffering decline in sales for two years in a row, Indian car industry is expected to see a marginal increase in sales this fiscal on the back of improvement in the third largest Asian economy.

The industry is hopeful that improvement in economic activity over the recent months and potential economic rebound after the formation of new government will provide a boost to car sales this fiscal.

Vikram Kirloskar, President of industry body Siam (Society of Indian Automobile Manufacturers) said, "Not fancy growth, but hopefully some moderate turnaround as there has been some improvement in the GDP numbers in recent months."

He added that the year of 2013 was one of the most difficult years for the car industry as the industry suffered tough business environment due to a number of factors, including sluggish economic growth, high interest rates, and fuel prices.

As per figures released by Siam, sales of passenger vehicles slipped from 26.66 lakh units in FY2012-13 to 25.03 lakh units in FY2013-14.

While car sales slipped 5 per cent, from 18.74 lakh units to 17.86 lakh units; sales of sports utility vehicles (SUVs) tumbled 5 per cent to 5.25 lakh units. Sales of vans slipped 20 per cent year-on-year to 1.9 lakh units in FY2013-14.

Commercial segment reported the steepest fall in vehicles sales. Dearth of infrastructure projects dragged sales of commercial vehicles down by around 22 per cent, from 7,93,211 units in FY2012-13 to 6,32,738 units in FY2013-14.