The Indian auto industry has had yet another forgetful year missing the annual sales growth forecast and the passenger car segment continuing to show de-growth. The Society of Indian Automobile Manufacturers or SIAM's FY13-14 sales report shows the total domestic vehicles sales clocked marginal growth of 3.5% lower than the forecast of 4-6%. Also disappointing was the second consecutive year of decline in passenger car sales by 4.6% compared to the drop of 6.7% for the last fiscal.
Having missed the sales forecast this year, SIAM has decided not put out a growth forecast for FY14-15 and has only said it expects moderate growth this fiscal.
Vikram Kirloskar, President, SIAM told NDTV, "Sluggish economic growth, high interest rates are affecting the buying patterns and customer sentiments. The growth forecast that I am seeing for passenger vehicles is, as in if I am lucky and I am praying it be plus zero. Motorcycles, two-wheelers looks good and positive. Commercial vehicles looks challenging. I think unless lot of the knots in the economy are untied and all of the infrastructure products are cleared out and then only the industry starts moving."
(Watch our interview with Vikram Kirloskar)
The slowdown in the economy and the weakness in the infrastructure space in particular, has resulted in a 20% slide in Commercial Vehicles sales.
But there were a few encouraging signs in the industry with the two-wheeler segment showing a positive growth of 7.3%. Scooter sales sped up to 23% percent year-on-year, though motorcycles saw lower growth - just under 4% in the same period.
Automobile exports have managed to stay positive with 7.2% growth in the last fiscal, with the likes of Hyundai and Nissan keeping export volumes high.
SIAM also highlights the continued interest from auto makers with new launches and variants for the Indian consumer. In 2013-14, there were 35 new model launches, 51 variants and 15 refreshes that hit the market. Analysts expect that trend to continue as that's the only thing that seems to hold the consumer's interest.
