Automobile output growth pegged at 6%

Automobile output growth pegged at 6%

Automobile production, which took a hit due to the high borrowing costs and rising fuel prices coupled with weak consumer sentiment in the April-August period, is likely to bounce back in the second half and may end financial year 2013 with about 6 per cent growth, CMIE has said.

The recovery in the production is expected to come on the back of festival season and a host of new launches by auto companies, the Centre for Monitoring Indian Economy (CMIE) said in its latest report.

“We expect automobile production to grow by 5.8 per cent in the current fiscal. Yet, this will be considerably lower than 13.8 per cent recorded in the previous fiscal.”

According to CMIE, the two-and three-wheeler industry, which accounts for almost three-fourths of total production, is expected to grow by a mere 5.9 per cent during the fiscal, impacting the overall industry’s growth.

“However, driven by a likely 32.7 per cent growth in the multi-utility vehicle segment, passengers cars and vans, the segment is expected to record a slightly faster 6.2 per cent growth,” the city-based economic think tank said.

Passenger car and van production dropped by 2.4 per cent in April-August period, the report said, adding however the festival season, new launches and resumption in production at the Maruti’s Manesar plant will help passenger car and van output to grow by 2.6 per cent this fiscal.

A likely pick-up in manufacturing activity and higher agricultural and export-import cargo in the second half is expected to generate a higher demand for transportation.

This, subsequently, will help limit the fall in medium and heavy commercial vehicles production to 6.4 per cent from 4.2 per cent in the April-August period, the report said.

However, light commercial vehicle production is likely to rise by a healthy 8.9 per cent, it added.