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OEM Update

Automotive Industry Attaining New Heights

June 16, 2010 5:12 am

The automotive industry in India is growing at an impressive rate driven by the investor friendly economy, cost improvements and new launches by OEMs. Automotive Mission Plan (AMP) 2006-2016 envisages that the industry size of least $145 billion, contributing to 10 per cent of GDP and providing employment to 35 million persons by 2016. Sugato Sen, Senior Director, Society Of Indian Automobile Manufacturers (SIAM) evaluates the performance of industry in an e-interview with Subhajit Roy.
 
How did the automobile industry in India performed during the last fiscal?
In 2009-10, automobile production showed growth of 25.76 per cent with Passenger Vehicles production crossing 10 million and Two Wheelers production being over 10 million. Both domestic and international market expanded. Domestic sales grew at 26.41 per cent and exports grew at 17.90 per cent.
 
What are the various factors that helped the industry register such a robust growth?
The key factors that have facilitated growth of the auto industry are:
•      Reduction in Excise Duty
•      Special Scheme for purchase of buses
•      Accelerated depreciation for commercial vehicles
•      Improved availability of liquidity
•      Reduced interest rates – auto financing rates reduced from 14per cent to around 10per cent
•      Increase in Disposable income of a section of the population due to implementation of Pay Commission recommendations
•      Cost improvements and new launches by OEMs
 
Which is that one segment of vehicle industry has performed extremely well?
Passenger Vehicle segment has been performing well followed by two wheelers. If we look at 3-year CAGR, Passenger Vehicle segment grew at 15 per cent, followed by Two Wheelers at 7 per cent. Commercial Vehicles and Three Wheelers segment both grew at 2 per cent.
 
The Commercial Vehicles segment registered a growth of 38.31per cent during April-March 2010 as compared to the same period last year. Which kind of vehicles are the major growth drivers in commercial segment?
The less than 3.5T segment goods commercial vehicles which comprise of 40per cent of the CV sales, grew at 44 per cent.  Some of the segments like 3.5 – 5T goods CV, more than 25T goods CV, though account for small share in the CV segment, grew at 3-digit growth rates.
 
What is your expectation from the current financial year?

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