News and Events

The Society of Indian Automobile Manufacturers slightly lowered its car sales growth forecast for the year ending next March, as higher costs and slower economic expansion impinge on demand. But Siam hoped demand would revive later in the year. Car sales for 2012-13 are expected to rise 9 to 11%, the group said, lower than the 10 to 12% growth it had forecast in April. Car makers are struggling to achieve double digit sales growth targeted by the industry as Asia’s third largest economy grows at its slowest pace in nine years, hurting a sector that has been one of the best performers over the past decade. The budget raised factory gate duty on cars from April 1, pushing up prices, although it did not impose a feared tax on diesel vehicles. Sales of diesel cars have soared in recent months, thanks to government subsidies that make the fuel 50% cheaper than petrol. Many carmakers, including Maruti Suzuki, TATA Motors and Toyota Motor’s Indian unit have temporarily reduced production in the last few weeks as the slowdown began to bite. In June, companies sold 155,763 cars, an annual growth of 8.3%, but the lowest sales volume since October last year. For the quarter ended June, sales were up just 5.2% far lower than the new annual forecast range. Industry executives defended the new sales forecast. Siam President S Sandilya said that “Fuel prices have come down moderately, interest rates are not going up, the government is under tremendous pressure to come up with reforms, we think it is kind of reasonable.” Mr Vishnu Mathur director-general of the industry body, said he expected demand to revive during the festive season that begins in September and peaks in November after Diwali. The industry body lowered its sales forecast for trucks and buses, expecting it to rise 6 to 8% over the current fiscal year, lower than the 9-11% it had predicted in April. It maintained its sales growth forecast of 11-13% for two-wheelers.