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Apr 04, 2012, 11.34 AM IST | Source: Moneycontrol.com

Auto industry likely to grow by 10-12% in FY13:SPA Research

SPA Research has come out with its report on auto industry. As per the research firm, demand in tractors may pick up from May, as farmers starts realizing proceeds from rabi crops and improvement in crop prices. The auto industry is expected to grow at a rate of 10-12% in 2012-13.

SPA Research has come out with its report on auto industry. As per the research firm, demand in tractors may pick up from May, as farmers starts realizing proceeds from rabi crops and improvement in crop prices. The auto industry is expected to grow at a rate of 10-12% in 2012-13.

Auto volumes in Mar 2012 were strong due to buying in cars, on account of anticipated increase in excise duty by 2% & imposition of tax on diesel cars in Budget 2012-13. Demand in 2-wheelers & tractors were a little sluggish on account of slower retail demand, lower rural income and higher base of last year. Demand has also been robust in CVs, as historically it has been a very strong month in terms of sales, as buyers expedite their purchases to take depreciation benefits. LCVs continue to show strength with the expansion of hub and spoke model leading to last mile connectivity. Total sales in FY12 were up by 11.5% YoY.

• Hero MotoCorp dispatches at 528290 units were up by 2% YoY and 1% on MoM basis.

• Hero MotoCorp numbers were affected by slowing domestic demand and growing competition largely from Honda Motors. Honda is set to launch a new 100-cc entry level bike Yuga, which may further weaken Hero's performance. However, as the Company increases its overseas focus by entering growing markets like Africa & Latin/Central America in the coming months, it would help it in maintaining its growth momentum.

• Hero MotoCorp expects two wheeler industry to grow by 10-12% in FY13.

• On expected lines, Hero MotoCorp has sold 6.23 mn vehicles in FY12, up by 15% YoY, surpassing its initial guidance of 6 mn vehicles.

In Mar 2012, Commercial vehicles segment grew by 20% on YoY basis & 11% on MoM basis. Passenger vehicles sales grew by 11% YoY & 7% MoM. In 2-wheelers segment, sales grew by 3% YoY & 2% MoM. In 3-wheelers, sales de-grew by 3% YoY & 15% MoM. Given the higher inventory levels in 2-wheelers, we expect sales to remain flat in April & pick up in May with the beginning of marriage season. Demand in tractors may also pick up from May, as farmers starts realizing proceeds from rabi crops and improvement in crop prices. We expect the auto industry to grow at a rate of 10-12% in 2012-13.

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