Growth in passenger vehicle sales may be higher than the 6-8% forecast for the current fiscal in view of better outlook for the economy, good monsoon and implementation of the 7th Pay Commission recommendations, Siam said on Monday.
The Society of Indian Automobile Manufacturers had in April revised downward the growth forecast for passenger vehicle sales at 6-8% for 2016-17 citing burden of high taxation and unfavourable environment around diesel vehicles. In March, it had already lowered the forecast to 11% from 12% stated earlier.
“There is no recalculation (on growth forecast for passenger vehicles) but we are expecting it to be better than that (6-8%),” Siam deputy director general Sugato Sen told reporters here.
Explaining the reasons for the auto industry's cautious optimism, he said the economy is expected to do well, monsoon has been good so far and although the interest rates have remained high they are expected to decline going forward.
“Passenger vehicle sales are also expected to increase as the 7th Pay Commission will boost consumer spending and it will positively impact the auto industry,” Sen added.
In the April-June period of 2016-17, the passenger vehicles segment has grown by 6.66 per cent at 6,97,154 units as against 6,53,593 units in the first quarter of last fiscal. One of the categories expected to do well is the utility vehicles segment, he added.