The Indian automobile industry today significantly lowered the passenger car sales growth forecast for 2011-12 to 2-4% due to lower output at Maruti Suzuki because of labour issues, and higher lending rates.
The Society of Indian Automobile Manufacturers (SIAM) had earlier revised the sales forecast for FY 2012 downwards for the passenger cars at 10-12% in July against 16-18% announced at the beginning of the fiscal.
"There is a general negative sentiment prevailing in the market due to various reasons. Interest rates and fuel prices are going up. Besides, developments in the Europe are also not encouraging," SIAM President S Sandilya told reporters here.
Besides, the labour unrest that is severely impacting productions at Maruti Suzuki India's (MSI) Manesar plant has also affected the car sales growth of the industry, he added.
"Maruti produces and sells 50% of the market's cars. So, any negative incidents happening at Maruti Suzuki will obviously impact the industry," Sandilya said.
In the April-September period this fiscal, domestic car sales declined by 1.36% to 9,09,283 units from 9,21,812 units in the year-ago period.
MSI's sales in this period also fell by 11.55% to 3,90,878 units from 4,41,899 units in the same period in 2010.
The total passenger vehicles segment is now estimated to grow by 4-6% in this fiscal compared to 10-12% projected in July. It was at first projected to grow at 16-18% in the beginning of this fiscal.
Utility vehicle sales is likely to surge by 9-11% now compared to 10-12% announced earlier.
On the total vehicles sales, SIAM revised its projections marginally upward to 11-14% for FY12 from 11-13% announced three months earlier.
Sandilya, however, said India became the second fastest growing passenger vehicles market in the world with 9.90% jump in sales during January-August period. Germany topped the list with 11.20% rate.
India was followed by the US, Brazil and China with 9.30%, 7.50% and 6.05% growth, respectively.
On the commercial vehicles segment, India was the fourth fastest growing market in the world, with an increase of 15.80% in sales in January-August this year. Germany topped the chart with 23.30% growth.
The UK and Brazil found berths at second and third positions with 21.10% and 16.60% growth respectively, SIAM said.
"Global economy is going through turbulence, but the Indian economy is going strong. Besides, there is a good rainfall in this year. These are some positive factors," Sandilya said, adding commodity prices and international crude prices are likely to soften in the coming months.
