The firm said that light vehicle sales in India declined year on year (YoY) for the 15th straight month in February, down 4% YoY at 246k. LMCA had expected February sales to be about 256k in our previous report.

Demand for Passenger Vehicles declined 3% YoY to 205k, which was a smaller fall compared to the previous five months.

At the same time, Light Commercial Vehicle sales up to GVW 6 tons decreased 12% YoY to 41k.

On a seasonally adjusted annualized rate basis (SAAR), sales were at 2.70 million units in February, lower than 2.76 million units in January and 2.82 million units last December.

The firm added that the industry is yet to see any major impact from last month’s duty reductions, even though OEMs immediately reduced prices across a majority of their models.

LMCA added that its current 2014 Light Vehicle outlook stands at 3.11 million units, or an increase of 6% YoY. However, given weaker than expected sales at the start of this year, it is likely to marginally revise down this forecast and is also considering downward revisions to the 2015 sales forecast, as the economy is currently projected to remain sluggish throughout next year.

‘Certainly, macroeconomic headwinds remain and buyers continue to be cautious about their spending especially on big ticket items such as new vehicles. There is also a “wait and see” approach until political uncertainty clears after the general elections. We believe these factors would continue to dampen sales in the first half of 2014. We anticipate the industry to do better in the second half, which would also be partially helped by new model/variant introductions,’ said Ammar Master, senior market analyst for India at LMC Automotive.

LMCA said that the major models to watch out for include Maruti‐Suzuki’s Celerio Mini Car, Hyundai’s Xcent Sub‐ Compact Car and the just launched Datsun Go Mini Car.

The Celerio is Maruti Suzuki’s replacement of the not‐so‐successful A‐Star (or new Alto) that was in the market since the end of 2008. Wholesale delivery to dealers crossed 10k in the first two months.

Hyundai’s Xcent was launched this month, and is the replacement for the discontinued Accent. Built off the Grand i10 platform, the Xcent sedan will be a good complement to the i20 hatchback to help Hyundai compete against popular sub‐compact sedans such as the Maruti‐Suzuki Dzire and the Honda Brio Amaze.

The Datsun Go, which came out this week, would be the most watched model this year. Targeted at first‐time car buyers and perhaps attempting to succeed where the Tata Nano failed, the success of the Datsun Go would also determine the soundness behind Renault‐Nissan’s strategy for emerging markets.