The slowdown in the auto industry has become more marked, what with increasing vehicle finance rates, rising fuel prices and lower production by market leader Maruti Suzuki.
SIAM, in its quarterly review, estimates the industry to grow at 11-14 per cent. However, it has revised its passenger car sales growth estimates to 2-4 per cent for the current fiscal, from its earlier estimate in July, of 10-12 per cent.
Domestic passenger car sales actually declined by 3,034 units (minus 1.8 per cent), in September this year to 165,925 units, from 168,959 units in September 2010, according to the Society of Indian Automobile Manufacturers (SIAM).
This is the sharpest dip seen in three years.
Reasons
“Vehicle finance rates have been going up from 9 per cent in April 2010 to the current 12.6 per cent. Commercial vehicle loan rates have also gone up from 12 per cent in April 2010 to 15.7 per cent now, causing moderation in the segment,” Mr S. Sandilya, President, SIAM, told reporters here.
Commercial vehicles registered an 18.04 per cent growth to 70,634 units in the month under review from 59,836 units in September 2010. Two-wheelers, however, have held their ground, growing at 24.27 per cent to 12,33,283 units against 9,92,383 units in September 2010.
“There have been a good amount of product launches, which has kept up the excitement among consumers. A total of 10 launches and 15 refreshments in the second quarter alone helped spur a lax market. However, I do not expect car demand to be significant this festive season,” Mr Sandilya said.