Car sales to grow 10-12%in FY13; CVs may take a hit

New Delhi, April 10: The auto industry is conservative with its growth projections for the current fiscal. It expects total sales to increase by 10-12 per cent which, though at the same levels as FY12, is lower than the 26 per cent growth seen in the post-slowdown years of FY11 and FY10.

The Society of Indian Automobile Manufacturers (SIAM) said that while car sales will rise 10-12 per cent in FY13, the growth of commercial vehicle (CV) sales is likely to come down to 9-11 per cent. In FY12, CV sales grew 18 per cent because of a surprise traction in the fourth quarter.

“CV sales growth is cyclic and uncertainties in infrastructure projects remain. However, they may rise further than our projections if the extended JNNURM scheme is announced for bus purchases by States,” Mr Vishnu Mathur, Director-General of SIAM, told Business Line.

He added that new models, especially diesel variants, and macro-economic growth, should help push car sales.

Other vehicles

The larger passenger vehicle segment, which also includes utility vehicles and vans, apart from cars, may also see a 10-12 per cent growth. Meanwhile, buoyed by rural demand, two-wheeler sales are expected to see a 11-13 per cent increase.

“Small car growth is still down because of the high cost of finance and low availability of diesel models in the segment. There may be a correction in the diesel-petrol prices this year,” he said.

Three-wheelers, the only segment that declined last fiscal, could see a 5-7 per cent rise this year, as States start issuing permits again for such vehicles.

However, the segment may be in trouble as a significant section of the demand is believed to have shifted to four-wheeled light CVs, such as the Tata Ace.

March Sales

A revival in car sales since January and a strong 20 per cent rise in March have helped the segment cruise back into the black for FY12, after being in the red for most of the year. Total vehicles sales were up 10 per cent in the month.

This is while passenger vehicle sales went up 21 per cent, as market leader Maruti Suzuki and rival Hyundai posted 2 per cent and 23 per cent increases. Tata Motors gained 33 per cent.

Commercial vehicle sales rose 15 per cent, with Tata Motors' sales growth at the same pace. Ashok Leyland and Mahindra & Mahindra saw a 12 per cent and 13 per cent increase respectively.

Meanwhile, two-wheeler sales rose 8 per cent, with Hero MotoCorp gaining 2 per cent and Bajaj Auto recording a 4 per cent decline. Honda Motorcycles, which overtook TVS as the third-largest two-wheeler maker in FY12, saw sales go up 55 per cent in March.