It seems like the Indian auto sector is gaining its lost form as the domestic car sales have finally shown signs of life after a lull of about five months. In November, the sales figures rose by 7% year on year, according to Society of Indian Automobile Manufacturers (SIAM). November witnessed sales of 171,131 units in the domestic market as compared 159,939 units during the same period last year.
India's largest car maker Maruti Suzuki has been credited for the encouraging trend that recently came the Indian auto market's way. As a matter of fact the market leader has managed to repair its base that received several blows from the prolonged labour unrest and the production process at its plant is going on in full swing currently. However, the resurrection may not be enough to cheer up the industry as there is high probability that firms would be unable to live up to even the meagre growth forecast of 2 to 4% this fiscal.
Sugato Sen, Senior Director at SIAM was quoted as saying, “The growth in November is still not enough to revive the industry. We don’t expect to meet our forecast of 2% to 4% growth in car sales for this fiscal and we may revise the forecast in January.”. In October, SIAM lost confidence on the car sales performance yet again, envisaging it to be around 2 to 4%, as against 10 to 12% forecast in July and 16 to 18% in April.
As the buyers are inclined towards purchasing new cars during the initial months of 2012, car companies like Maruti and Ford India are making efforts to break the plateau by announcing price hikes for January.
It is important to note that within the industry, there were segments that recorded negative sales figures. The production capacity witnessed a push, reaching to 71,074 units as against 70, 298 units earlier. On the other hand, the sales fell to 52,502 units as compared to the previous figure of 63,269 units.
The accumulative sales of Maruti’s Ritz, Swift and Estilo stood at 22,159 units, against the 23,014 units sales previously. The combined sales of Hyundai's i10, Getz and i20 managed to reach 17,322 units that were down considerably from the 21,845 units figure achieved before.
The buyers are banking on diesel cars currently, owing to the frequent hike in the prices of petrol. Sen said that the diesel cars would probably mark their dominance over 33% of the market this fiscal, as against 27% till last year.
Two-wheeler segment too found itself in the line of fire as Honda Motorcycle and Scooter India manufactured 15,967 units and sold 12,298 units, against the previous figures of 12,478 units.
Thus, increasing fuel costs, exorbitant loans and untamed inflation has been stalking the economy from a long time, forcing it to slowdown significantly and pressurise the auto industry to no limit.
