FY14 also likely to be difficult for auto industry: SIAM

Moneycontrol Bureau

Its been a dismal year for India's automobile industry, but their woes are likely to continue well into next year, feels industry body Society of Indian Auto Manufacturers. Domestic car sales in Feb plunged 26 percent year-on-year to 1.59 lakh units, the most in 12 years. So far this year, car sales are down 5 percent on the back of expensive loans and high fuel prices. Utility vehicles have seen strong growth (up 54 percent year-to-date) helped by new launches like Maruti Suzuki Ertiga, Mahindra Quanto and Renault Duster. Sales of lights trucks like Ashok Leyland Dost and Tata Ace have also maintained a good speed (up 15 percent in April-Feb). But else where its a pretty gloomy picture. M&HCV sales are down 23 percent, and two-wheeler sales are up just 4 percent. Vikram Kirloskar, vice president of SIAM says FY14 looks "very difficult" for the auto industry. "Feb has been one of the worst months...I am really concerned for this year, it looks tough," he told CNBC-TV18. SIAM has already had to cut its sales growth forecast for FY13 several times. It, for instance, revised its car sales growth forecast in Jan to just 0-1 percent from 1-3 percent in Oct, 9-11 percent in July and 10-12 percent forecast in April last year. But even the 0-1 percent growth is unlikely to be achieved given the sales slump last month. "I am hoping that in the months to come the interest rates will start coming down and the sentiment will improve. Presently, the sentiment is the biggest problem, people don't seem to be wanting to buy car. We are getting people in the showrooms but it is the completion of the order which is not happening," Kirloskar, who is also vice-chairman of Toyota Kirloskar Motor, said.