Car sales seen to grow 13 pc in current fiscal

Car sales seen to grow 13 pc in current fiscal

Car sales seen to grow 13 pc in current fiscal

A file picture of the newly launched Hyundai Verna. AFP

Analysts said the forecast was conservative and India, along with China, was one of few bright spots for automobile sector, particularly while recovery in the United States and Europe continues to be unsteady.

SIAM forecast car sales to rise to 1.7 million units in the year to end March 2011. It also forecast truck sales, a barometer of economic activity, to rise 17-18 per cent and motorcycles to climb 9-10 per cent.

Car sales rose an annual 30.8 per cent in June, but lower than record sales seen in previous month as pent-up demand waned and a rise in vehicle prices also dampened sentiment.

After depressed sales in the last half of 2008 and early months of 2009, demand for automobile sales have been on a rising trajectory as a resilient Indian economy bounced back from a global depression.

Firms sold 141,184 cars in June, compared with 107,948 units a year ago, but lower than the record 148,481 units sold in May, SIAM data showed.

Maruti Suzuki, had earlier reported a 28 per cent fall in June sales compared to May due to a six-day shutdown of its plant for maintenance. Sales of trucks and buses, rose 44 per cent to 52,211 units in June, while motorcycle sales rose about 30 per cent to 715,985 units.

“This is the first attempt by SIAM to forecast after considering all relevant demand drivers for each segment, although I personally think we have a good chance of outdoing the forecast”, SIAM President Pawan Goenka told reporters here.He said while the first quarter of ongoing fiscal has witnessed good growth, the growth is likely to slowdown in the second quarter as high base effect from last year will start kicking in.

“The key challenges for the industry as a whole are rising commodity prices, although it has stabilised in the last 2-4 weeks. Supply constraints from suppliers are also a concern,” he added.

Rising interest rates and possible increase in prices of vehicles when Bharat Stage III norm is implemented across the country by October are other factors, he added.