The Hindu Business Line : Maintaining speed on growth highway

The automobile industry's tryst with another milestone is on course this year too. Having grown at 15-17 per cent in 2006, both the passenger four-wheeler and two-wheeler segments will be able to cross key new targets that should reinforce the potential of the Indian market.

The passenger vehicles segment, which includes cars, utility vehicles and multi-purpose vehicles, will in all likelihood cross 1.5 million units in terms of total production this fiscal.

Similarly, the total production in 2006-07 of two-wheelers, which include scooters, scooterettes, mopeds and motorcycles, is likely to cross 8.7 million units.

Unlike the four-wheeler segment, where each sub-category would have recorded double-digit growth, in the two-wheeler space, with the exception of bikes, the other categories will all end up with negative growth rates.

Last year (2005-06) the production of passenger four-wheelers totalled 1.31 million units and that of two-wheelers, 7.6 million units.

The growth trend continues to indicate that passenger cars and motorcycles are the two key drivers of growth in the two segments, even as the performance by the multi-purpose vehicles category this fiscal has been equally impressive.

The other milestone that the auto industry could reach during the current year is on the exports front.

Exports of passenger four-wheelers could cross 2 lakh units, while the export of two-wheelers is all set to cross the 6.5 lakh units. According to the Society of Indian Automobile Manufacturers (SIAM), based on the trends till November 2006, the automobile industry is expected to produce around 10.9 million vehicles in calendar year 2006 and register about 17 per cent growth in overall production. This is up from the 14.5 per cent growth in 2005.

SIAM (Society of Indian Automobile Manufacturers) data indicate that the cumulative growth of passenger vehicles is expected to be almost 19 per cent during the calendar year.

This is in contrast to the less than 7 per cent growth witnessed in 2005 over 2004. Passenger car sales are expected to grow at around 20.5 per cent compared to 12 per cent for utility vehicle sales and 16 per cent in the case of multi-purpose vehicles.

The trends observed among the sub-segments of the passenger car industry also indicate that the performances have been mixed. While mini-cars (Maruti 800) recorded a negative growth (- 7.2 per cent), as have premium cars in the Rs 12 lakh-plus or 4701-mm-plus size category (- 5.6 per cent), the compact cars sub-segment has registered a good growth rate of 25.3 per cent. While the sales of cars in the mid-size category rose 18.9 per cent, that in the executive segment recorded the highest growth rate of 32.9 per cent this calendar.

The launches

The most exciting and important new launches during 2006 were:

Passenger cars and UVs: New Mercedes S-Class; new Toyota Camry; Tata Indica XETA; GM-Chevrolet Aveo; Maruti Wagon-R Duo; Honda Civic; Chevrolet SRV; Lamborghini Murcielago and Gallardo; Hyundai Verna; Audi Q7; Maruti Suzuki Zen Estilo; and new Honda CR-V

Two-wheelers: Bajaj Discover 112; Hero Honda Pleasure; Bajaj Platina; TVS Apache; Yamaha Gladiator; Suzuki Zeus; Hero Honda Glamour PGM-FI; Kinetic Blaze; Hero Honda CBZ X-treme; and new Bajaj Pulsars.

Cars to look out for:

Eight new cars to look forward to in 2007 are: Suzuki Swift Diesel; Mahindra-Renault Logan; BMW 3-Series and 5-Series; GM-Chevrolet Spark; Volkswagen Passat; Fiat Grande Punto; new Maruti-Suzuki Baleno; and Mini Cooper.