The Society of Indian Automobile Manufacturers (SIAM) has yet again cut the car sales growth forecast for 2012-13 to 0-1 per cent blaming mainly the high inflation, the slowing economy and the rising fuel price. In October, the Society had lowered the expected growth rate to 1-3 per cent.

Overall also, it expects the automobile industry growth to dip to 3-5 per cent from its October estimate of 5-7 per cent.

The industry body will carefully watch aspects that can hurt the industry — interest rates, fuel prices, commodity rates as also government policy initiatives.

Sales of medium and heavy commercial vehicles have dropped steeply because of moderating agricultural growth, drop in mining, sustained slowdown in industrial activity, and lower replacement volume, it said.

“With the current economic outlook, the industry needs to grow at a pace much faster than what is expected to keep in line with the targets of Automotive Mission Plan (AMP) 2014,” S. Sandilya, President, SIAM, said. The AMP 2014, set in 2006, targeted sales of $145 billion for the industry, but it is expected to achieve only $111 billion by then.

He said SIAM has requested the Government to consider extending AMP till 2026 to further nurture the sector to extract benefit for the economy in terms of contribution to GDP, value addition and employment.

“Going by the current trends, we do not think the industry will be able to recover in the fourth quarter unless the Government provides support,” he said.

Sandilya said though overall sales grew 2.77 per cent in December, passenger car sales dropped 12.50 per cent to 1.41 lakh units compared to 1.61 lakh units sold in the same month of 2011.

Overall, auto industry sales in December rose to 1,451,517 units compared to 1,412,372 units in the previous period. For nine months (April-December), sales grew 4.57 per cent to 13,314,969 units (12,732,483 units).

> ronendrasingh.s@thehindu.co.in

Related Topics