The Indian auto sector has been in a slump of sorts for the last two years and this is despite a host of new cars across various segments. A constant hike in prices thanks to fluctuating exchange rates brought demand to an all-time low. To counter this and as a measure to gain political mileage, Finance Minister P.Chidambaram in his Interm Budget announced cuts in Excise duty across various segments, resulting in much jubilation and automakers dropping their product prices significantly. However, a report in Live Mint suggests that automakers and consumers are still being cautious and are only expecting a rebound once the General Elections are completed and the new government takes power.
The report suggests that all the major automakers that had various models on display at the Auto Expo are banking on launching them once the new government has taken power. Quoting an auto analyst, the report suggests that vehicle sales will get a seven per cent hike this year.
It also quotes various CEOs all saying that just like them, even the consumer have put their car needs on hold and will make purchases once there is a confirmation on government policies and consequently prices.
We at CarWale too have been observing fluctuations in the market, increase in prices and consequently drop in demand for vehicles despite the fact that it has been an exciting 18 months in terms of new cars. We hope that new government from whichever party will bring stability to the industry and hopefully car sales will pick up significantly from that period onwards.