Indian auto market sales for current fiscal year maybe headed to a decline for the first time in a decade
Society of Indian Automobile Manufacturers (SIAM) is of the opinion that the auto market here is likely to embrace a fall in sales for the first time in a decade for this fiscal ending March 2012. While January 2011 posted 7.2 sales growth for the Indian auto market the numbers aren’t adequate to compensate for sales decline in late 2011. November and December of 2011 too posted a sales growth after four consecutive months of sales decline.
Director General of SIAM, Vishnu Mathur had this to say. “The car industry is too sensitive to interest rates, and we don’t see interest rates coming down quickly.” “Unless sales grow in February-March at 10 to 12 percent, which is unlikely, the industry will miss the sales projection.”
Car sales growth stood at 30% for the year ending March 2011, and the first sales decline in 3 years was reported in July 2011. As per SIAM, 196,013 cars were sold in the Indian auto market in January 2012. This equates to car sales from March 2011-January 2012 as 1.57 million units, marking 1.19% sales decline when compared to the same period in the earlier year.
Vehicle sales in India find a major boost in the growing middle class that is for the most part dependant on loans to make purchases. Usually discounts from car brands also work towards cementing a purchase. Perched on the back of a growing young population with rising incomes, and low penetration, car sales in India continue to strive for growth.
SIAM looks at vehicle sales growth of 11-13% for the fiscal beginning Q2 of 2011 if RBI goes easy on interest rates. Interest rates have been hiked 13 times since March 2010 to combat inflation in India. This January, Maruti Suzuki registered 5.2% sales growth their first in since May. The automaker dealt with multiple strikes, tool down periods, vehicles being sabotaged, and harm to equipment, all masterminded by factory workers at Manesar with intent to hurt Maruti. For the current fiscal year, Maruti expects 11% sales decrease.
Motorcycles sales registered 10.51% growth in January 2012 with 825,887 bikes sold. SIAM had estimated 13-15% growth for the current fiscal. Sale of trucks and buses rose 13.5% for January 2012 at 69,859 vehicles sold.