Car sales in 2012-13 are expected to go up 11-13 per cent, with the overall auto market posting up to a 12 per cent growth. This outlook was given by the Society of Indian Automobile Manufacturers (SIAM) said on Tuesday.
“With interest rates expected to fall and income levels going up, we believe there will be an upward trend. The indicators are positive and the low base of the current year is one of the reasons for the confidence,” Mr S. Sandilya, President, SIAM, said.
Mr Vishnu Mathur, Director-General of the industry body, added that the pent-up demand from FY12 could help boost sales in FY13.
SIAM, however, said that the projections are on the basis of a cost of ownership model, which is expected to reduce next year across segments. Unforeseen incidences such as an increase in diesel car prices, fuel price movements and impact of the India-EU free trade agreement on the sector have not been taken into account.
Mr Sandilya said that commercial vehicles and buses could see even higher sales if sops are announced in the Budget in March, or if the JNNURM scheme for bus purchases is extended.
Lower growth
The sales outlook for 2011-12 has also revised downwards by SIAM. With the last quarter left, car sales are expected to be largely flat (0-2 per cent rise), down from the 2-4 per cent rise predicted in October last year.
Total auto sales are expected in the 11-13 per cent region, with the highest growth in light commercial vehicles (28-30 per cent), followed by two-wheelers at 13-15 per cent.
“We need to watch for commodity and fuel prices, while the global uncertainty in Europe may also have some effect. The labour situation should be alright, but inflation has eased slightly,” said Mr Sandilya.
He added that the Reserve Bank of India is expected to not raise interest rates anymore and may just reduce it by 200-500 basis points progressively from the next cycle.
December Sales
Higher sales (eight per cent) in the past month have been attributed largely to the high amount of discounts offered by manufacturers as well as expectations of price increases from January.
Car market leader Maruti Suzuki though posted a 13 per cent decline among the larger players, largely on its unavailability to match the high demand for diesel models. Sales for Hyundai and Tata Motors rose 13 per cent and 41 per cent, respectively.