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MOTORINDIA
l
March 2012
If the vehicle production and sales fig-
ures for April-January 2012 released by
SIAM are anything to go by, a fairly good
pick-up in demand for vehicles of differ-
ent categories can be said to have been
achieved. This despite the adverse impact
of the general US slowdown and the Euro-
zone debt crisis dampening the economies
across the world, including India, as well
as the escalating interest rates for vehicle
financing. Cumulative vehicle production
for the 11-month period registered an ap-
preciable growth of 14.56 per cent over
the same period of last year, the output in
January alone going up by nearly 12 per
cent as compared to the same month last year. Barring three-wheelers, sales of
which registered a negative growth of 0.44 per cent, sales in other segments
were encouragingly high. The CV segment grew by 18.63 per cent. Passenger
vehicles recovered marginally at 1.45 per cent and utility vehicles were up by
13.03 per cent. Particularly in January, passenger cars, vans and utility vehicles
recorded a commendable growth of 7.20 per cent, 14.15 per cent and 15.72 per
cent respectively, while growth in the overall passenger vehicles and CVs in
the month was 8.86 per cent and 13.52 per cent respectively.
A clearer picture of the things to come emerged earlier with the enthusiastic
participation by both Indian and overseas vehicle and component manufactur-
ers in Auto Expo 2012 held in Delhi. The number of exhibitors for the first time
in the history of the expo exceeded 1,500, with over 50 new launches of differ-
ent vehicle models and accessories most suited to the modern era. The overall
impression among the participants was that India is the second best destination,
next only to China, for interested automotive investors. Several MNCs took
the opportunity to tie up with their Indian counterparts, and more collaborative
ventures are in the offing if the negotiations underway attain frution. Based on
the current estimated growth, the Indian auto sector is sure to attain the double-
digit growth which it could register consecutively for three years preceding the
recession-hit 2008.
What has enthused general industry is the RBI move to cut the cash reserve
ratio (CRR) by 50 basis points from six per cent to 5.5 per cent with effect from
January 28, which, in effect, would mean a release of Rs. 32,000 crores into
the financial system to spur industrial growth. This is considered a measure
to restore the growth trajectory by ensuring sufficient liquidity. Further, the
Finance Minister, Mr. Pranab Mukherjee, has well responded to the RBI initia-
tive by observing that the cut in CRR would signal that the next step is a cut in
general interest rates. This augurs well for the economy, for the contemplated
low interest regime in the forthcoming Union Budget would benefit all industry
sectors, including automobiles.
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Editorial
www.motorindiaonline.com
Vehicle demand picking up ?
R. Natarajan, Managing Editor & Publisher
MOTORINDIA