The automobile industry is seeing a steady decline in demand and there are no signs of any pickup yet, RC Bhargava, the chairman of India's largest passenger car maker Maruti Suzuki said on Tuesday.
Automobile sales have slumped this year amid high fuel prices, expensive loans and the overall slowdown in economic activity. In Feb, passenger car sales slipped 26 percent year-on-year to 1.59 lakh units, the most in 12 years. Medium and heavy truck sales are down 23 percent.
Bhargava expects the weak auto sales trend will persist going ahead as the overall sentiments remain weak.
"It is not (just) the demand in the sale of cars, it is number of people who walk into showroom, it is the number of inquiries, it is number of conversion of inquiries to orders. All of that has slowed down. So it is not something which is just a momentary kind of event, it is something which is going to last for a longer time," he told CNBC-TV18.
Vikram Kirloskar, the vice-president of Society of Indian Automobile Manufacturers, who is also the vice-chairman of Toyota Kirloskar Motor, also said earlier that FY14 was also likely to be a difficult year for the industry .
Even if the interest rates are cut by banks the sales are not likely to see a turnaround, he feels, pointing to out that private banks have reduce auto loan rates by around 2 percent over the last few months, yet car sales have continued to tumble.
The decline in sales, in-turn leading to rising inventory at dealers and factories, has forced several automakers including Maruti to take production cuts.
Bhargava said Maruti Suzuki usually maintained inventory at around 21 days, but the company has resorted to shutting production as and when it feels the inventory is building up and that policy will continue.
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