SIAM to further cut down sales growth for this fiscal

The snail paced growth in the Indian car market had led to further cut down in the sales forecast. This is the third revision of the forecast made by SIAM (Society of Indian Automobile Manufacturers), where the organization has predicted a growth of 16-18% in the car industry as compared to the last year's 29.7 %, which translates to 2.2 million car sales. However, the continuous petrol price revisions at intervals and the high lending rates have accounted for further slowing down the market. Observing the trend, SIAM has cut down the overall auto mobile industry sales forecast to 12-14% from 16-18%, with 12% car sales prediction for the month of July.

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The latest revision is expected to stand at 6-8% in the year 2011-2012 according to the latest information from SIAM. The RBI has not spared the consumers with regular revisions of the interest rates on the loans for 12 times. This has reinforced the consumers to think twice before any possible purchase of a car as around two-third of the cars purchased are through financial institutions. With the latest updates, the petrol price now stands to be Rs 66.84 a liter in New Delhi after six revisions and the interest rates are 3.5 percentage points. The car sales in India have dropped by 1.5 times in the first five months of FY2011-2012 as compared to the last year. Mr Balendran, VP of GM India has informed that the car industry is expecting a growth not more than 5-10% in the festive season, which is normally 15-20%. Maruti India had suffered a major loss in sales this year with two strikes at the factory in June and August.

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Maruti India’s September sales report has shown a drop of 17% sales as compared to the corresponding period of last year. The overall loss incurred by the company due to the over one month impasse at the factory was reported to be around Rs 540 crores. The car sales have declined drastically as fewer number of people are opting to replace their old cars with new car purchases. On the other hand, consumers opting for a new car purchase have gone up, while people who already own a car are weighing their options. The ratio of the second or the third car buyers to the first-time car buyers is 44:56.

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