The Society of Indian Automobile Manufacturers attributes this to slowing demand, subdued rise in incomes, as also higher vehicle and fuel prices.
SIAM also cut this fiscal’s car sales projection for the second time this year, and now expects growth to be in low singles. The current projection is now 1% to 3% lower than the already lowered forecast of 9% to 11% in July.
Mr S Sandilya president of SIAM said that “Overall, the auto industry’s sales will grow by 5% to 7% much lower than the earlier estimate of 11% to 13% for this fiscal. We don't expect to have a good festival season.”
According to SIAM, the cost of ownership of passenger cars is expected to increase by 3% to 5% on the back of petrol price rise and vehicle price hike. This will further decelerate passenger car segment. Car makers such as Honda, General Motors and Maruti Suzuki, as also Audi have all hiked prices ahead of the festival season.
Mr S Sandilya said that “The USD 145 billion turnover target of the 2016 Auto Mission Plan is unlikely to be met, given the current growth figures. In our estimate, the industry would fall short by 20% to 25% by 2016, which translates into USD 34 35 billion.”
Source - Business Line
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