Auto cos revise growth plan to single digit

The Indian car industry is under shock due to the sudden hike in the petrol price followed by the key policy rate hike by RBI. It has albeit jinxed the expectations of the auto manufacturers who envisaged to see a jump in the car sales due to the upcoming festive season. It was predicted that the auto industry would witness a steep fall in the growth rate compared to the last year's 30 per cent . Owing to the continual jump in the petrol price coupled with high interest rate, the growth rate for the current fiscal has been revised to single digit number. Companies rolled out several offers and discounts to improve the falling sales, but now they feel that it will be difficult to lure the consumers.

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A slew of new car launches are lined up in the upcoming festive season as the demand surges during this time. However, the double whammy of fuel and interest rate hike can pour cold water to it. After March 2010, the reserve repo has been increased for the 12th time, petrol price on the other hand has been hiked for the 9th time since June 2010. GM India wishes to continue the discount scheme which was rolled out two months back in order to rev up the sliding sales. SIAM asserted that it would review the growth rate for the first half of FY2011-2012 in October and along with that will also mull over revising the forecast for the complete year. SIAM had predicted the growth rate to be around 16-18 per cent for the current fiscal which was later revised to 12 to 13 percent few month back.

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The auto aficionados believe that this year companies with a high range of diesel cars will score good. Few of the companies rendered the diesel avatar of their popular models, mainly hatchbacks. Small car segment constitutes 75% of the market, major player in this segment is Maruti Suzuki India with a wide range of small cars under its portfolio. The company also launched the revamped version of its flagship Swift, but due to the ongoing strike at its Manesar plant, the sales figure has fallen greatly. The dark clouds are still hovering over the Indian car industry and it will take a while to see the silver lining.

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