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Backed by strong economic growth and new model launches, the Indian automobile industry has registered a 26.17 per cent growth in vehicle sales during 2010-11. But the Society of Indian Automobile Manufacturers (SIAM) said that the growth is likely to slow down this year due to rising input prices and higher borrowing costs.
According to latest SIAM data, the total vehicle sales in India in FY11 stood at 1,55,13,156 units compared to 1,22,95,397 units in the previous financial year.
“Strong GDP growth, new launches and moderate price increase has helped us achieve good growth,” Mr Pawan Goenka, President, SIAM told reporters here.
Speaking on the outlook for the current fiscal, he said, “It is difficult to maintain such high growth. The increase in interest rates and commodity prices is a concern. We are forecasting local car sales to grow between 16 per cent and 18 per cent in the current fiscal”.
SIAM also expects growth in scooter and motorcycles sales to slow to 12-14 per cent from last year's 26 per cent, while truck and buses sales are expected to grow at about 14-16 per cent compared to 27 per cent.
Meanwhile, passenger vehicles sales grew at 29.16 per cent during April-March 2011 over the same period last year. In comparison, passenger car sales rose by 29.73 per cent to 19,82,702 units from 15, 28, 337 units a year ago.
SIAM said total two-wheeler sales in FY11 also increased by 25.82 per cent at 1,17,90,305 units compared to 93,70,951 units in FY10. Motorcycle sales were up by 22.86 per cent at 90,19,090 units as against 73,41,122 units in 2009-10. While scooter sales during the year jumped 41.79 per cent to 20,73,797 units from 14,62,534 units in the previous fiscal.
The sales of commercial vehicles increased by 26.97 per cent to 6,76,408 units from 5,32,721 units in the previous fiscal.
Mr Vishnu Mathur, Director General, SIAM, said commercial vehicle (CV) sales usually do better in the last month of the fiscal because of the depreciation benefits. Exports, however, have been strong as there has been high demand from traditional CV markets of Africa and the neighbouring countries in Asia. The month may have seen a peak in exports due to some bulk order being serviced.
Speaking on exports, Mr Goenka said, during April-March 2011, overall automobile exports registered a growth rate of 29.64 per cent. While passenger vehicles registered marginal growth at 1.64 per cent in this period, commercial vehicles, three-wheelers and two-wheelers segments recorded growth of 69.51 per cent, 55.86 per cent and 35.04 per cent respectively during April-March 2011.
Meanwhile, domestic passenger car sales rose 24.37 per cent to 194,199 units in March 2011 from 1,56,145 units during the corresponding period a year ago.
SIAM said this is the 21st consecutive month that local passenger car sales have grown over 20 per cent year on year. March car sales were 2.7 per cent higher than the 189,008 units sold in the previous month, the industry body said.
Asked if SIAM is seeking further clarity on the definition of completely knocked down (CKD) unit, Mr Goenka said, SIAM has asked the Government to reconsider its decision on CKDs. Also, the industry lobby said it has sought more time for manufacturers to scale up facilities for assembling engines, transmission and gear boxes locally.
In the Budget for 2011-12, Finance Minister Mr Pranab Mukherjee had redefined the meaning of CKD units, ostensibly to encourage local production of automobiles, which may alter the rate of customs duty on different imported parts.
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