Automobile makers are keeping their fingers crossed on the revival of India’s passenger car industry after a dip in sales for the fourth consecutive month till October on the back of high fuel prices and interest rates. Some manufacturers, however, expect the market to show some signs of recovery from next March-April.
Car sales in India, the world’s second fastest growing automobile market after China, were down by 23.8 percent in October. It was the biggest monthly percentage decline since December 2000.
The Society of Indian Automobile Manufacturers (SIAM) has cut its sales growth forecast for the current financial year to 2-4 percent from its earlier projection of 16-18 percent due to soaring interest rates and continuous rise in petrol and commodity prices.
Maruti Suzuki India Ltd. (MSIL), the country’s largest car maker, said the trend of fall in sales was likely to continue if the macro-economic conditions remained unchanged.
“Passenger car sales are substantially down obviously due to high fuel price and rising interest rates. The trend is likely to continue if the macro-economic conditions of the country do not change,” MSIL chief general manager (marketing) Shashank Srivastava told IANS on the phone from Gurgaon.
The company, which earlier slashed its sales growth target from 13 to eight percent for this fiscal due to inflation and other issues, now says even this is unlikely in the current economic scenario. “That (8 percent sales growth) target looks unlikely...it will be less than that,” Srivastava said. He also said the recent petrol price cut by the country’s oil retailers by Rs.1.85 per litre, the first cut since January 2009, will not have any impact on the weak demand.
The state-run oil marketing companies raised the prices of petrol, the fifth increase this year, by Rs.1.85 per litre earlier this month before slashing the prices.
Global automotive major General Motors expects that the country’s gloomy car market, which has been experiencing sluggish demand from January 2011, may show signs of revival from March 2012.