NEW DELHI: Back on its road to recovery after a prolonged downhill journey for most part of 2014, the Indian auto industry is looking ahead for a smoother ride in the new year while building upon an estimated $5-billion investments announced in the year passing-by.
Even as the year was drawing to a close, the sales figures remained disappointing with close to 10 per cent decline in the number of cars sold during the first eleven months of 2014 and festival seasons failing to bring any cheer.
It required a lot of efforts -- both on the part of the companies and the government in form of duty sops -- to kickstart the recovery from challenging conditions that the industry had to face this year.
The industry is hoping for continued support from the policymakers for a conducing business environment to grow further and address any fresh challenges in form of safety and environmental issues.
The year, which kicked off with the marquee industry event Auto Expo, also saw many new models hitting the market and helping sales counter ticking in a tough environment, which was worsened by the first-ever anti-trust order for the company when fair trade watchdog CCI imposed a fine of Rs 2,545 crore on 14 car makers.
Despite challenging conditions, various automakers including Maruti SuzukiBSE -0.87 %, Mahindra & Mahindra, Bajaj Auto, Hero MotoCorpBSE -0.12 % and Volkswagen announced investments in the country totalling Rs 20,500 crore over a period of time, which along with some other smaller investments are estimated to have taken the total tally to close to $5 billion.
"This year has been the year of turnaround. We have started witnessing growth after a long slowdown. We can say we have bottomed out and started to move towards recovery," SIAM Director General Vishnu Mathur told .
"By the end of the fiscal, we would see the growth coming back to the industry. We are looking forward to fundamental changes in the economy to support better sentiment which has evolved lately," he added. For the country's car market leader Maruti, this was a year when it was forced to seek minority shareholders approval by investors over its plans to let parent Suzuki to own and invest at its proposed Gujarat plant.
Yielding to the demands of the auto industry for support in the form of excise reduction, the previous UPA government, however, announced duty cuts to 8 per cent from 12 per cent for small cars, scooters, motorcycles and commercial vehicles; 24 percent from 30 percent for SUVs; 20 percent for mid-sized car from 24 per cent and 24 per cent for large cars from 27 per cent.
Major car makers passed on the benefit to customers by reducing product prices and helped the auto industry post some good months in terms of sales, but the end of the year saw the prices again ticking up due to rising input costs. After the Narendra Modi-led government came to power in May, it extended the excise duty cuts till December 31, giving the industry the much-needed fillip and the carmakers are now hoping for this support to continue in the new year.
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