Jan. 17, 2013
/PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:
India Autos Report Q1 2013
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BMI believes new forecasts released by the Society of Indian Automotive Manufacturers (SIAM) in
are too bearish. SIAM now expects passenger car sales to grow by 1-3% for FY2013 from a
previous forecast of 10%. According to S Sandilya, the President of SIAM, the slowdown in economic
growth coupled with high interest rates will further decelerate growth.
However, we agree with the headwinds seen by SIAM for the Indian auto market and are also revising
our FY2013 forecasts for the overall passenger vehicle sales market downwards to come in at 2.86mn
units, a growth rate of 6.8% from 9.1% previously. On the whole though, we are more bullish on
auto industry than SIAM.
While SIAM citied the recent diesel price hike as one of the reasons to downgrade growth in passenger
car sales to 1-3%, we do not believe that the hike will have such a huge negative impact on this segment.
We do not expect the spread between diesel and petrol to narrow much further going forward due to
political pressures to maintain diesel subsidies. Although the price of diesel has increased, it is still much
cheaper than petrol. Therefore, the strong demand for diesel vehicles is expected to continue.
Moreover, while sales of passenger cars and vans have stagnated recently, utility vehicles (UVs) such as
MUVs have enjoyed very strong year-on-year (y-o-y) growth for the past few months. It is our view that
this segment will outperform the overall passenger vehicle market going forward and we expect this