SIAM cuts down projection for domestic vehicle market

For the second time in four months, the Society of Indian Manufacturers (SIAM), lowered its projection for the country’s vehicle market. Car sales in India are projected to grow at a low of 1-3% during the current fiscal year. SIAM attributes the decreasing sales to constantly increasing fuel prices and auto finance rates, slow economic growth, devaluation of the Indian Rupee against the U.S. Dollar, inflation, as well as instability in the market, which has made consumers wary of investing in new vehicles. Total car sales recorded in September this year dropped to 157,536 units compared to 166,484 units in the same month last year.
S. Sandilya, SIAM president, said that subdued increase in incomes, coupled with rising cost of ownership also contribute to the deceleration of growth. He added that the downward trend is likely to continue until the economy improves.
 
According to reports, sales of domestic vehicles experienced the biggest drop in three years and nine months at more than 9% in September. However, most car companies remained positive that they would be able to recover lost sales during the upcoming Indian festival season when local buyers usually invest their money in new vehicles. (October 13, 2012)