The slowdown that has gripped the automobile industry in the current fiscal year is likely to continue till 2009-10, leading research and consultancy firm Crisil research has said.
Difficult financing conditions and rising cost of ownership have caused a slowdown in automobile sales since April 2008. In its outlook for the sector, Crisil research said that industry will have to contend with lower margins as sluggish demand has compelled them to partly absorb input cost increases. The firm expects the deceleration to continue until 2009-10.
But the slowdown picture does not hold for all segments. Passenger cars, for example are one of the worst affected and Crisil expects it to grow by 6-7 per cent in 2008-09.
This is in tune with the growth so far (April-August) at 6 per cent but a far cry from the 2007-08 figure of 12 per cent for the full year.
Two wheelers on the other hand, will see a turnaround of sorts after being in the red in 2007-08.
“Despite the existing tight finance scenario, sales growth recovered during April-August 2008-09, with increase in cash purchases and rising income levels in rural areas,” Crisil said. We expect domestic two wheeler sales to grow by 7-8 per cent in 2008-09 as against the 9 per cent decline in 2007-08."