The Society of Indian Automobile Manufacturers (SIAM) on Wednesday lowered its growth forecast for the year from 16-18% to 11-13% due to falling sales in recent months as high interest rates and rising costs bite, auto makers, meanwhile, are mulling price hikes that could further stifle purchases in the world’s second-fastest growing auto market after China.
The passenger vehicle sales growth fell 8.9% in July, which was followed by a 5.7% decline in August. “From high growth in 2010-11, sales moderated in the first few months of the fiscal and lowered in the last couple of months,” said Goenka.
Despite lower demand, car makers are under pressure to increase prices.
Mahindra & Mahindra had hiked prices by 1-2% in August. “We take price corrections time-to-time. We took one in March and one in August,” said Rajesh Jejurikar, chief executive, M&M.
Japanese automobile major Toyota will also increase the prices of its cars between 1.5% and 2% effective October 1.
About price hikes, PM Telang, MD, India operations, Tata Motors said, “We are feeling pressure from all sides.” The company has cut production in both passenger and commercial vehicle segments to align its output with market demand.