Car Industry in India witnesses first ever huge decline in 11 years

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It seems that this New Year is again gearing up to face some challenging and tough times for the passenger car sector. For the very first time in eleven years, annual car sales declined in the year 2013 thereby registering 10% decline when the number of units sold reached to 18.07 lakh. Slowdown in the Indian automobile industry in the year 2013 is expected to continue in the year 2014, at least for its former half. Last year was not too promising for a majority of car manufacturers. Only few car makers enjoyed success last year. Though, many car manufacturers are planning to launch new models this year but political instability may pose a lot of challenges.



Negative plunge experienced by Indian automobile sector

SIAM or Society of Indian Automobile Manufacturers released some data depicting the state of Indian automobile sector. The year 2013 experienced a steep decline in sales of passenger cars. After a long time, the industry experienced this steep decline after 2002. In these 11 years, the sales plunged into the negative territory. Tough and challenging times are being faced by the automobile sector. Growing input costs and tapered demand is responsible for these unstable times. Negative streak that was 14 month long experienced declining sales. This situation has also raised questions about chances of future revival.

New SKODA Octavia

Reasons behind declining sales

The passenger car sector experienced declining sales due to reasons like inflation, rising cost of fuel, growing input costs, and unfavorable rate of interest. The interest among potential customers has dampened as a result. Out of past seventeen months, only last 3 months have been a little positive for the automobile industry but this turn for the better may be short lived owing to the upcoming general elections in the country. New launches may give a push to the sector.

This post was written by

BK Arvind – who has written posts on
I have been writing auto blogs for more than 6 years now. Prior to Carfuel, I was associated as content manager with notable media companies and top auto websites. I also like to take translator assignments. Automobiles have always been my passion. Through Carfuel, I aim to reach out to all media enthusiasts.

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Car Industry in India witnesses first ever huge decline in 11 years, 1.0 out of 10 based on 1 rating