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SIAM may lower car sales outlook again in January

The Indian automobile industry is likely to see a downward revision of the passenger car sales growth forecast for 2011-12 for the third time this fiscal in January due to sluggish demand over the last few months.

According to the Society of Indian Automobile Manufacturers, the passenger car segment may not even see single-digit growth in the current fiscal.

Mr Sugato Sen senior director of SIAM told reporters that “During the auto expo next month, we are going to revise our sales projections for the fiscal... I feel the passenger car segment will again be downgraded.”

Mr Sen said that “We may not see a decline in car sales for the entire fiscal... The numbers may be just at the same level of last fiscal.”

In October, SIAM had significantly lowered its passenger car sales growth forecast for 2011-12 to 2 to 4%, the second revision after pegging it at 10 to 12% in July against its projection of 16 to 18% announced at the beginning of the current financial year.

During April to November this fiscal, domestic car sales declined by 3.53% to 1,219,509 units from 1,264,142 units in the year-ago period.

After four consecutive months of decline, the domestic car segment witnessed a turnaround with 7 per cent growth in sales in November this year on account of a marginal revival in demand, coupled with a low base. However, sales in December are likely to be lower than the November numbers.

Car sales in India have been declining on a year-on-year basis since July, mainly due to the severe impact of labour issues on Maruti Suzuki India ’s production.

Sales registered their steepest monthly decline in nearly 11 years in October this year, tanking by 23.77% on account of a huge drop in output by MSI due to labour trouble, coupled with high interest rates and fuel prices.