Auto sector growth could slow down to 14-15% in 2011
Rising interest rates coupled with increasing fuel prices and input costs have the potential to affect the Indian auto sector's growth which could slow down at around 14-15% in 2011 as compared to 31% in 2010, a top industry official has said.autos Updated: Feb 13, 2011 10:46 IST
Rising interest rates coupled with increasing fuel prices and input costs have the potential to affect the Indian auto sector's growth which could slow down at around 14-15% in 2011 as compared to 31% in 2010, a top industry official has said.
The industry had grown at 23-24% in 2009 despite the global economic slowdown.
"High input costs and rising fuel prices coupled with a steady hike in interest rates would affect sales this year for the overall industry. However, we (GM) don't expect any contraction," General Motors India vice president, corporate affairs, A Balendran, told PTI in Mumbai.
GM India's sales grew a mere 6% in January this year to 9,984 units from 9,421 units in the same month of the previous year. It expects a similar sale in February as well, Balendran said.
"Market sentiment is very low at this point. There are issues like the economic slowdown, (tight) liquidity and inflation. These are not very good signs for the auto industry. It would make the products costlier."
Crude oil prices have touched $100 per barrel thus making petrol dearer for consumers, Balendran said, adding prices are expected to rise further.
The country's largest car-maker, Maruti Suzuki, had recently said it fears a drop in demand for the auto sector in FY 12 driven by factors like high inflation, rate hikes and high fuel prices.
"Things like high inflation, the rate hikes and the fuel price increase point out to a tightening in the situation...we need to be wary and careful as the buoyancy we saw till now will definitely slow down a bit," Maruti Suzuki chief general manager, marketing, Shashank Srivastava, had told PTI early this month.
Srivastava, however, did not give any estimate of industry growth.