According to a source in the Society of Indian Automobile Manufacturers (Siam), the overall industry has remained flat in the last financial year vis--vis 2007-08 and commercial vehicles (CVs) have taken a huge hit, primarily because of slowdown in the domestic as well as global economy.
This is far less than the earlier estimate of low double-digit growth made at the beginning of the financial year by several auto analysts and industry leaders.
According to Siam, the total automobile industry in India had declined by 4.7% in 2007-08 at 96,48,105 units as compared with 1,01, 23, 988 units in 2006-07. This was mainly on account of 7.92% decline in sales of two-wheelers, which constituted around 75% of total vehicles sold in the country, at 72,48,600 units in 2007-08 as compared with 78,72,334 units in the preceding financial year.
For the period between April and February, the cumulative sales of CVs have gone down by 21.8%. However, with demand picking up in a small way since the first stimulus package was announced in December, the segment has registered an overall decline of around 20% in the last financial year and some of the sub-segment has gone down by as much as over 50%, he says without divulging further details.
The source, however, added that the growth in sales of CVs on a month-on-month basis since December have had only a marginal effect on the overall performance.
While the auto sales figures would be officially released by Siam on Wednesday, it is expected that medium and heavy commercial vehicle segment would have taken a huge hit and goods carrier would have been the worst effected sub segment. The M&HCV segment had posted a dip of 31.7% between April and February at 1,64,172 units vis--vis 2,40,364 units during the same period in 2007-08.
The commercial vehicle segment had registered a growth of 4.1% in 2007-08 at 4,86,817 units as against 4,67,765 units in 2006-07.
The numbers of October, November and December signalled a negative growth for the industry and it could have been worse had it not been for the stimulus packages announced by the Centre. Several measures that were introduced thereafter, including the reduction in excise duty and lower interest rates, have revived the sentiments and this has resulted in a flat growth, says a Mumbai-based analyst.