Auto sector doubles car-sales growth forecast...

Passenger car sales will grow faster than projected earlier, the Society of Indian Automobile Manufacturers Association (SIAM) said on Friday, doubling its growth forecast for the current fiscal to 23% from the earlier 12%.

As per data released by the industry body, sales of passenger cars surged nearly 30% year on year to 1,69,082 in September as rising incomes and new models prompted drivers to buy a record number of vehicles for the third straight month.

For the April-September period, sales were up about 34% on year at 9,22,281 units. Among the other auto segments, utility vehicles grew 20.69%, multi-purpose vehicles by 49.32% and two-wheelers by 25.86% during the six-month period. The overall commercial vehicles segment grew 41.59%.

Car manufacturers including Maruti Suzuki India, Ford Motor Co and Toyota Motor Corp have lined up a host of new launches this fiscal. As many as 32 new models were introduced in just the first two quarters.

Mahantesh Sabarad, senior vice-president - equity research, Fortune Group said, “Indian buyers are generally excited and eager about the new launches. Also, if we look at the last month of the quarter, some of the most awaited car launches are in pipeline —- for example Tata Aria and Toyota Etios.”

“Recently introduced cars like Ford Figo, Nissan Micra, Chevrolet Beat and Volkswagen vehicles are getting popular within Indian buyers,” he added.
Pawan Goenka, president, SIAM, said, “India is one of the important markets for the auto players. Globally, India is second largest market in the passenger car segment with 32% market share, while it is leading in the CV segment with 59% market share.”

Some of the important trends driving the overall growth of the automotive industry are good GDP growth, higher consumer confidence, increased spending on infrastructure and thrust on rural employment. “We see the momentum to continue in the coming quarter,” said Goenka.

On the challenges, he said, “Capacity constraint is an issue but manufacturers have found ways to neutralise the situation. Also, the increasing commodity prices is a cause of concern for the industry. Steel prices have gone up again in October, while rubber prices have stabilised.”
Rising interest rates are yet another concern. “Further hike in policy rates might significantly affect the industry,” Goenka said. (With Bloomberg)