More Indians to buy cars this year

Growth in car sales in the country will grow 12-13 per cent in the ongoing fiscal, almost half of what was achieved in the last financial year, Society of Indian Automobile Manufacturers said on Thursday.

Coming out with its first ever such forecast, SIAM said rising commodity prices, supply constraints from components makers and a declining low-base effect will be the major factors that will impact the sales growth.

SIAM predicted that the total sales of cars in domestic market is expected to be at 17,14,925 units in 2010-11.

In 2009-10, domestic passenger car sales stood at 15,26,259 units as against 12,20,475 units in 2008-09, an increase of over 25 per cent.

"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", SIAM president Pawan Goenka told reporters in New Delhi.

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He 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 high base effect from last year will start kicking in.

Automobile sales in 2009 had picked up after a slump during the first half of the last year. In comparison, in April-June quarter of this fiscal, total car sales increased by 33.43 per cent at 4,33,641 units compared to 3,24,985 units in the year-ago period.

"The key challenges for the industry as a whole are the rising commodity prices, although it has stabilised in the last 2-4 weeks. Supply constraints from the suppliers are also a concern," Goenka added.

Rising interest rates and possible increase in prices of vehicles when Bharat Stage III norm is implemented across the country by October are other factors, he added.

As per SIAM, total passenger vehicle sales in India will be at 2,196,791 units in 2010-11 as against 1,949,248 units in 2009-10, up 13 per cent.

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Two-wheeler sales in FY'11 is expected to be up by 9-10 per cent at 10,287,837 units from 9,368,230 units in FY'10. Motorcyle sales will increase by 9-10 per cent at 80,38,338 units from 7,341,139 units last fiscal, and scooter sales will rise 13-14 per cent at 16,57,349 units from 14,62,507 units in the last financial year.

SIAM said commercial vehicles' sales in India will grow around 17-18 per cent at 6,21,681 units this year from 531,395 units last fiscal.

According to the industry body, the three-wheeler segment is expected to record the least growth at around 7-8 per cent.

SIAM said total three-wheeler sales in 2010-11 are likely to be 4,73,693 units against 4,40,368 units last fiscal.