Auto industry of India will maintain flat growth rate in the ongoing fiscal, the second consecutive year. 20.16 lac cars were rolled out in the industry in Financial Year 2011-12 in the country, just 2 per cent higher in comparison with the sales of the preceding fiscal, when the industry grew by a stupendous 30 per cent. It is anticipated that sales of passenger cars in the nation will be close to 20 lac units in FY 2012-13.
The largest car manufacturer of the country, Maruti Suzuki India Limited (MSIL) saw sales go down by 11 per cent in the country in the previous fiscal. Its top brass also believes that FY 2012-13 will pose greater challenges for the sector, thus adversely affecting sales. Mayank Pareek, Managing Executive Officer - Marketing and Sales, MSIL, said that there are no expectations of a boost in sales in the industry.
At the launch event for the company's latest offering, the Ertiga Multi Purpose Vehicle (MPV), Pareek told, “These are testing time for all of us. We will have to keep the excitement on with new launches and by refreshing existing models.”
Talking about the unremarkable predicted growth rate for car sales, Arvind Saxena, Director - Marketing and Sales, Hyundai Motor India Limited, said, "Interest rates, fuel prices and optimism has deteriorated in last 12 months. In spite of India being a low penetration market, the growth is expected to be stunted this year." These factors were responsible for the slump in sales in the last two years as well.
Hyundai India experienced 7.7 per cent increase in sales on Year over Year (YoY) basis in the 2011-12 fiscal through sales of 3.87 lac units. Saxena said that the South Korean manufacturer will work towards maintaining its overall market share, which currently stands around 19.2 per cent, in spite of no growth in sales.
Moreover, car makers operating in India were forced to increase the prices of their models after a hike in excise duty that was announced by the national government in the Union Budget for the current financial year. This situation was worsened when some states also raised the local taxes applicable on cars, such as Maharashtra, where the combined taxes was hiked by 6 per cent in April 2012
Prospects of exports are also not good as the financial crisis in Europe has caused a recession in Euro Zone. Europe is the biggest export market for cars made in India and accounts for close to 80 per cent of foreign-bound shipments. Last year, 5 lac cars were exported from the country, an increase of 14 per cent on YoY basis.
