Indian Automobile Sector Outlook 2014

We are just a few days away from the end of 2013 and just three months away from the end of FY 2013-2014. While it has not been a great year to talk about Automobile sales per se, the new fiscal 2014-2015 might be the answer to struggling automotive majors who have had their act cut out in 2013.

A recent research by Dun and Brad Street says the second half of 2014 might spell success for Indian car companies owing to interest rate cuts which will act as a catalyst in aiding growth. In the year 2013 there were many deferred purchases, which according to the research might get converted into actual sales by second half 2014. The underestimated rural markets might act as the second catalyst for certain segments and companies in 2014.

The growth of passenger vehicles was down by 7.5 per cent from the start of 2013 until now as fuel prices and interest rates went north. The rising price of diesel might slow down the demand for diesel cars.

India’s big dream of being an Automobile Export hub is a question mark, with EU’s non-tariff barriers and preferential duty agreements with some African and Latin American countries. This could act as a hindrance to companies that had started establishing their foothold in these markets.

It has always been wafer thin margin rates and it might not get any thicker until the first half, with increased competition, weak sales and heavy discounts doled out by manufacturers to attract buyers. The second half of 2014 may be hold the key to success for many automobile manufacturers in India, with a lot of new launches also coming up, in short it’s a mixed year for the automobile industry ahead.

Source: Dun and Brad Street India