The Indian automobile industry has warned the car makers that it is likely to miss the Automotive Mission Plan (AMP) target of the government for fiscal 2016 by a huge margin. The statement was issued after recording the steepest monthly sales fall in September 2012 in almost four years and gashing up the yearly forecast for second time in a row.
According to AMP 2006-2016 target, the auto industry was expected to touch $145-billion mark before the end of fiscal 2016; however the figures are anticipated to miss around by 20 to 25 per cent from the current level of growth rate. Speaking further on this statement, the President of Society of Indian Automobile Manufacturers (SAIM), S Sandilya said, “Economic growth is not encouraging, inflation is not under control and the cost of vehicle ownership is high.”
Besides, the industry lobby reduced the sales goal of passenger cars to mere 1 to 3 per cent for the current fiscal against 9 to 11 per cent projected earlier. The reasons cited for this were economic pressures, low buyer sentiments and increase in fuel prices as well as interest rates, which are together threatening the sales in Indian auto market.
The alterations also follow a 9.43 per cent year-over-year fall in the overall sales for the month of September. As per the reports issued by SIAM, the passenger car sales in domestic market reduced by 5.36 per cent, while the demand for motorcycles witnessed a negative growth of 18.85 per cent, which happens to be the steepest fall in three years and nine months.
However, industry experts also believe that the major reason for fall in September this year was because of a high base of the year ago month, wherein a major part of festive season was covered. And in this year, the festive season has been divided in the months of October and November.
On this, R C Bhargava, the Chairman of India’s largest passenger car maker Maruti Suzuki said, “With growth rates coming down, the per capita income has also come down by 3 per cent and therefore, the affordability (of vehicles) has become even worse. The Q3 should be definitely better, with festive season spreading out in October and November, but replicating the same in Q4 will be tough, as the fourth quarter of last fiscal had a very strong base.”
