According to the outlook given by the Society of Indian Automobile Manufacturers, passenger vehicle sale in the country is likely to grow at 12% to 13% in the current fiscal.
Though the growth rate is almost half of the achievements in the last fiscal, SIAM said that a declining low base effect will be the major factor to impact the sales growth.
According to SIAM's projections, total passenger vehicle sales is slated to be at 2.196 million units in 2010-11 against 1.949 million units in 2009-10, up by about 13%. In the 2009-10 fiscal, passenger car sales clocked a growth of 25% but this came on the back of a low base as passenger car sales took a hit during the 2008-09 fiscal where it stood at 1.552 million units.
Commercial vehicles' sales in 2010-11 is slated to grow around 17% to 18% at 621,681 units compared with 531,395 in the previous fiscal. The projected growth is slower than the 38% clocked in the 2009-10 fiscal.
However, last fiscal's growth was also accelerated by the low base effect of 2008-09 when the global economic crisis crippled the industry.
Two wheeler sales in the 2010-11 fiscal has been projected to grow by about 10% to 10.287 million units from 936,823,0 units in the previous fiscal.
Dr Pawan Goenka president of SIAM said that "This is the first attempt by SIAM to forecast after considering all the relevant demand drivers for each segment, although I personally think we have a good chance of outdoing the forecast.”
Dr Goenka said that while the first quarter of the ongoing fiscal has witnessed good growth, the growth is likely to slowdown in the second quarter as the high base effect from last year will start kicking in. he added that "The key challenges for the industry as a whole are the rising commodity prices, although it has stabilized in the last 2 to 4 weeks. Supply constraints from the components suppliers are also a concern.”