FY13 has not been a particularly good year for the auto industry. Indeed, slowdown in the economy, high fuel prices, firm interest rates and higher consumer inflation have all taken toll in some form or the other on the demand for vehicles. Given that the fiscal is almost over, focus has now shifted to how the scenario will pan out for the sector in FY14.

The industry is closely linked to GDP growth. Thus, unless GDP growth picks up, the outlook for the auto sector will continue to stay subdued. And things are not looking too good for FY14 either. For the first six months at least, the demand is likely to remain subdued. Even dealers across the country have pointed out that the demand environment has been poor and deteriorating. Further, footfalls and enquiries have also reduced. In a tough economic environment, consumers are wary of loosening their purse strings for big purchases. Thus, if the Indian economy begins to display signs of recovering in the latter half of the coming fiscal, then that positive impact will be rubbed off on the auto sector as well.