The apex body Society of Indian Automobile Manufacturers (SIAM) curtailed its growth projection for the domestic vehicle market for the second time in four months and said that the car sales in the country will grow at 1 to 3 per cent during the current fiscal. SIAM accused the ever increasing fuel prices and auto finance rates, slackening economic growth and the devaluation of Indian National Rupee (INR) against the US Dollar to be the prime reasons behind its new projection. Further, the lack of stability in the market has steered away the Indian buyers from investing in new vehicles.
The embarrassing sales figures and gloomy demand for motor vehicles has piled on immense pressure on the top Indian automobile operators. During the September 2012, the total car sales recorded in the country dropped to 1,57,536 units as against the sales of 1,66,464 units during the same month of last year.
Underlining the reasons behind the latest cut in growth projection of Indian car sales, S. Sandilya, President, SIAM said, “The overall economic situation of the country, low sentiments, high petrol prices and interest rates are among the factors which are hurting the overall sales of the auto industry. Inflation is not under control and the cost of vehicle ownership is high. Economic growth is also not encouraging which is putting pressure on sales in the automobile industry. Subdued rise in incomes along with rising cost of ownership will further decelerate growth," he added. "This trend is likely to continue for some time until the economy comes back on track.”
Reportedly, the sales of the domestic vehicle market suffered the biggest drop of three years and nine months at more than 9 per cent in September 2012. However, most of the car companies remain positive of recuperating for the lost sales during the upcoming Indian festival season, which is usually the period when most domestic buyers invest their hard earned money in new vehicles.
