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2013 - The year of slowdown for Indian Automotive Industry!

Snapshot: Indian Automotive Industry went through various ups-downs in 2013; Here is an effort to give everyone a brief recap to that

The journey of Indian Automotive Industry in 2013, can be best described as a long endless and dark tunnel during which the industry witnessed a record decline in the sales graph, multiple vehicle recalls and numerous strikes.

2013 was one of the most challenging years, Indian automobile industry had ever faced. Adverse currency exchange rates, higher input costs, hike in excise duties and above all, increasing fuel price, all the factors in common compounded severe problems for automobile companies in the country.

"The year was marked by disappointing performance for the industry...the industry saw one of the most prolonged and deep slowdowns," Society of Indian Automobile Manufacturers (SIAM) Director General Vishnu Mathur.


Successful Launches: The automobile manufacturers tried their level best to fight the economic downturn in the country by launching new products in the market. But only a handful of models such as compact sedan Amaze from Honda and sports utility vehicle EcoSport from Ford managed to tackle the slowdown.

Recalls: The year saw one of the biggest recalls by any carmaker in India. US auto giant General Motors recalled 1.40 lakh units of its multi-purpose vehicle Chevrolet Tavera manufactured between 2005 and 2013 over emissions and specification issues. Despite GM, many other leading car manufacturers such as Maruti Suzuki (Ertiga, Swift, Dzire and A-Star), Toyota (Corolla), Ford (EcoSport) and Mahindra and Mahindra (Scorpio) also recalled their cars over some issues in the previous year.

Labour Strikes: The year also witnessed some of the biggest labour issues as Bajaj two-wheelers, Hero Moto Corp and Mahindra & Mahindra faced labour strikes at their plants. Workers at Bajaj's Chakan facility went on a 50 day strike for the sake of higher wages. Whereas, Hero Moto Corp also faced same type of issue during its wage negotiations with workers at its Gurgaon facility. While Mahindra faced labour strike at its Nashik plant due to some rift between management and labour unions.

Sales Drop: In the longest period of slowdown witnessed by the Indian auto market, car sales dropped continuously for nine months till July this year. Though it recovered for two months of festive season in August and September, the sales again dipped in October and November. In January to November, car sales in India fell by 10.32 percent to 16,74,450 units as against 18,67,176 units in the corresponding period last year.Besides cars and bikes, the commercial vehicle market in India was also affected badly with economic activities such as mining and infrastructure projects came to a near halt. Although the festive season did bring some happiness in terms of sales as September registered its highest sales.

Shut-Downs: With slowing sales, manufacturers were left with no option but to cut their production capacities by production shifts closures and temporary plant shut downs.Maruti Suzuki India (MSI) undertook a one-day production cut at its Gurgaon plant in March and in June at its Manesar factory. Similarly, M&M shut down its tractor plants at Jaipur for five days and the Rudrapur plant for two days. The company also stopped production at its car manufacturing for eight days in July.

Investment Hurdles: Economic slowdown in the country also had a bad impact on investments. The biggest car manufacturer in the country, Maruti Suzuki said it would miss target of commissioning its Gujarat plant, where it plans to invest INR 4,000 crore. As per the original plans, the company had planned to roll out 2.5 lakh cars annually by 2015-16 from the Gujarat plant.

Price Hikes: The year 2013 started with price hikes. In January almost every auto manufacturer announced a price increment and then same act was repeated in the month of April and October. Towards the end of the year, the companies followed the previous year's trend and announced that they would hike prices in 2014.

New Entries: Many new automobile manufacturers entered in the market. The British bike brand Triumph made its debut in India. Two-wheeler market leader Hero MotoCorp on the other hand announced their ambitious plans to enter 50 new markets and touch INR 60,000-crore turnover by 2020.

This year turned out to be a difficult year, but the auto industry, however, has not given up hopes. It is desperately looking to come out of the slowdown and the Auto Expo, scheduled to be held in February, will be the perfect platform for a comeback. Hopes are still alive- Cheers!

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