In reverse gear

The full impact of the financial crisis is being felt by Indian car manufacturers a few months after the financial crisis hit the world. With dealers resorting to heavy discounting to move stocks, yet retaining massive inventories, auto manufacturers were forced to cut production in December. Sales of passenger vehicles fell for the first time in several years, with sales falling from 115,300 units in December 2007 to 99,300 units in December 2008. However, cumulative sales have just shown a minor decline of 0.46 per cent as sales in the first six months of the fiscal were still respectable.

Even though interest rates for car loans have declined, most manufacturers expect sentiment to continue to be weak in the coming months.

Hit hard
Sales in Dec. 2008 vs Dec. 2007
Maruti Suzuki -10.9%
General Motors -35.6%
Toyota Kirloskar Motor -54.1%

—Kushan Mitra