The company has slashed its 2013 light vehicle outlook by 4% or 132,000 units compared to last month. Sales are currently projected at 2.88 million units, which represent a decline of 12% year on year (YoY).

For passenger vehicles, LMCA has reduced its outlook by 5% or 125,000 to 2.34 million units (‐8% YoY), while the outlook for light commercial vehicles up to GVW 6 tons was reduced by 7,000 to 537,000 (‐25% YoY).

In August, light vehicle sales were at about the same level as the previous month but were down on year by 1% at 222k. Passenger vehicle sales climbed 6% YoY to 174; however, the increase was over depressed volumes in 2012 when Maruti Suzuki had locked out its Manesar facility for 20 days.

Meanwhile, demand for light commercial vehicles shrunk 19% YoY to 48k as small‐ and medium‐ sized businesses deferred purchases.

The industry achieved sales of 1.95 million units in the first eight months, divided between 1.58 million passenger vehicles and 371k light commercial vehicles.

‘OEMs will find it difficult to significantly boost sales in this festival season, and will be forced to offer higher incentives to win buyers,’ said Ammar Master, senior market analyst for India at LMC Automotive.

‘Newer vehicles such as the recently launched Maruti Suzuki Wagon R Stingray and Hyundai Grand i10 will garner numbers but these are likely to come from the existing versions in the market. We believe the overall sentiment remains weak in India,’ he added.

LMCA added that its new 2014 outlook is at 3.15 million units, or a 9% increase over 2013. The market is expected to expand at a CAGR of 17% in the next six years.

As a result, India is forecast to have a market size of 8.18 million light vehicles by 2020.