The Society of Indian Automobile Manufacturers (SIAM) has lowered its car sales expectations for the current year owing to higher costs, mounting petrol prices and other economic obstacles. In April this year, SIAM had anticipated that the sales for the fiscal would surge to 10 to 12 percent and now, after considering the present economic scenario, the industry body is forecasting the sales growth to shoot up to 9 to 11 percent.
The Union Budget released in March this year pronounced hike in excise duties leading automakers to quote higher prices for their product line in the country. Since the petrol prices are currently on the upward stance, the sales of the diesel powered cars have drastically increased while the demand for petrol run cars has dived steeply.
Automakers in India such as Maruti Suzuki, Toyota Kirloskar Motor and Tata Motors were compelled to temporarily shut down the production operations of the petrol cars in a bid to avoid inventory pile up.
As per the sales data, in June, the automakers in the country tallied the sales to 1,55,763 units marking a growth of 8.3 percent annually, which is the lowest sales volume recorded since October 2011. During the first quarter of the current fiscal, the sales growth measured at 5.2 percent far lower as compared to the estimated annual growth rate.
Mr. S. Sandilya, President, SIAM, commented that the fuel prices are relaxed to minor extent, interest rates are constant, so demand is not likely to shoot up at an accelerated pace. At the present situation, government is under pressure to announce new reforms and thereby, the new estimates are reasonable.
