For the first time, Siam has projected car sales figures for the year...in my opinion the industry will do a little better than what Siam had projected, Goenka said. He said in the first three months of the fiscal, the car segment rose at 27-28% and for the Siam projection to come true the car sales has to grow at 10% for the rest of the year. As per the projection the car industry should grow by around 10% for the remainder of the year but I think it will grow more, he said.
Ruling out any immediate impact on sales due to the tightening of interest rates by the RBI, Goenka said the rising commodity prices continued to worry the sector. Interest rates and inflation are not a big concern right now... inflation though continues to be a bit of a worry. The primary worry is increasing prices of commodities. Rubber is a big concern, he said.
Goenka added that the volatility in commodity prices were also prompting steel companies to enter into shorter contract agreements than in the past. Nobody is sure (about the steel prices) most companies are refraining from long-term contracts because steel is such a major input to our overall cost structure and a wrong move over there could have a major impact, he said. He also cited capacity constraints on the part of the suppliers as a major worry.
Goenka said Siam is working extensively on brand-building for the domestic auto sector. We collaborating with Japan, German and British associations to bring the Indian automobile industry more into focus...in way its also a brand-building exercise for the domestic auto industry and thats a major area for us, he said.