The Indian automobile industry today significantly lowered the passenger car sales growth forecast for 2011-12 to 2-4 per cent due to lower output at Maruti Suzuki because of labour issues,and higher lending rates.
The Society of Indian Automobile Manufacturers (SIAM) had earlier revised the sales forecast for FY 2012 downwards for the passenger cars at 10-12 per cent in July against 16-18 per cent announced at the beginning of the fiscal.
“There is a general negative sentiment prevailing in the market due to various reasons. Interest rates and fuel prices are going up. Besides,developments in the Europe are also not encouraging,” SIAM President S Sandilya told reporters here. Besides,the labour unrest that is severely impacting productions at Maruti Suzuki India’s (MSI) Manesar plant has also affected the car sales growth of the industry,he added.
“Maruti produces and sells 50 per cent of the market’s cars. So,any negative incidents happening at Maruti Suzuki will obviously impact the industry,” Sandilya said. In the April-September period this fiscal,domestic car sales declined by 1.36 per cent to 9,09,283 units from 9,21,812 units in the year-ago period. MSI’s sales in this period also fell by 11.55 per cent to 3,90,878 units from 4,41,899 units in the same period in 2010. The total passenger vehicles segment is now estimated to grow by 4-6 per cent in this fiscal compared to 10-12 per cent projected in July. It was at first projected to grow at 16-18 per cent in the beginning of this fiscal. Utility vehicle sales is likely to surge by 9-11 per cent now compared to 10-12 per cent announced earlier. On the total vehicles sales,SIAM revised its projections marginally upward to 11-14 per cent for FY’12 from 11-13 per cent announced three months earlier. Sandilya,however,said India became the second fastest growing passenger vehicles market in the world with 9.90 per cent jump in sales during January-August period. Germany topped the list with 11.20 per cent rate. India was followed by the US,Brazil and China with 9.30 per cent,7.50 per cent and 6.05 per cent growth,respectively.
On the commercial vehicles segment,India was the fourth fastest growing market in the world,with an increase of 15.80 per cent in sales in January-August this year. Germany topped the chart with 23.30 per cent growth. The UK and Brazil found berths at second and third positions with 21.10 per cent and 16.60 per cent growth respectively,SIAM said.
“Global economy is going through turbulence,but the Indian economy is going strong. Besides,there is a good rainfall in this year. These are some positive factors,” Sandilya said,adding commodity prices and international crude prices are likely to soften in the coming months.
“Since April 2010,interest rates have been hiked by a total of 3-3.5 per cent and it is a serious concern. However,RBI has hinted that there may be only one more hike and then it may stop… Without addressing the supply side,we cannot control inflation,which is still very high,” Sandilya said. There were 10 new launches in the both the passenger vehicles and two-wheeler segments in July-September quarter. Besides,the passenger vehicle and two-wheeler industries,both saw 15 vehicles being refreshed to suit consumer tastes. Dwelling on the forecast,SIAM said growth projection for the two-wheeler segment has been revised upward to 13-15 per cent from 12-14 per cent announced three months earlier,while that of the three-wheeler segment has been lowered to 4-6 per cent from 8-10 per cent.Growth projections for commercial vehicles have also been revised northward at 13-15 per cent as against 12-14 per cent,which was revised lowered in July. It was earlier projected to grow at 14-16 per cent for the entire fiscal. Sales in the light commercial vehicles segment are now estimated to rise by 20-23 per cent,up from earlier forecast of 17-19 per cent. However,medium and heavy commercial vehicle sales are expected to be up by only 5-7 per cent as against 8-10 per cent,Sandilya said.