Siam sees car sales rising 12% this year

Car sales rose 19.7% in March, a fifth straight monthly increase, but climbed only 2.2% in the full fiscal 2012 as high interest rates and rising fuel costs kept buyers away in the first half of the year.

The growth is the slowest since the fiscal year 2008-09, when sales rose only 1.4% as India grappled with the impact of the global financial crisis. Sales grew 25% in 2009-10 and 29% in 2010-11. Total sales in fiscal 2011-12 were 2.02 million cars.

However, car sales are likely to pick up this fiscal and may log in double-digit growth at 10-12%, according to Society of Indian Automobile Manufacturers (Siam).

Manufacturers sold 229,866 cars in March against 1,92,105 units sold in the same month of the last year.

“This was the first time the car sales in the country crossed the two million units mark. A late surge of sales in the last quarter of the fiscal, especially in March, as buyers advanced purchases ahead of the Budget, helped,” Siam president S Sandilya said.

Sales of trucks and buses rose 14.8% in March and an overall 18.2% in 2011-12. Siam said they are expected to grow 9-11% this fiscal.  

Motorcycle sales rose 1.2% in March and 12% in the fiscal and are expected to grow 10-12% in the current fiscal, Siam said.

“We believe interest rates will maintain or go down from here and fuel prices will remain stable,” Sandilya said.

With interest rates likely to come down and the overall GDP expected to rise at around 7.5% to 8% , the prospects of the auto industry is good for the ongoing fiscal, he said.

Vishnu Mathur, director general of Siam, said the car market should revive this year with the central bank expected to start rolling back its aggressive string of rate hikes as inflation eases.

“The number of car owners is still pathetically low in India — there is huge scope for the auto industry,” Mathur said.

Maruti Suzuki, the country’s biggest car maker, sold 10.8% less cars in fiscal 2012 over the previous fiscal as it also suffered production losses on widespread labour strikes at its factories.

Hyundai Motor India sales 7.88% at 387,168 units in the last fiscal while Tata Motors sales rose marginally to 257,966 units (255,704). With agencies