The Society of Indian Automobile Manufacturers (SIAM) has cut its forecast for growth in sale of passenger vehicles for the current fiscal by almost half, citing higher taxes and a ban on the sale of large diesel cars in Delhi as the main reasons.
According to SIAM, the segment is now expected to grow between 6 and 8 per cent from the earlier projection for 12 per cent. The demand slowdown has impacted investments in capacity expansion.
Key Points
SIAM even revised the forecast downwards to 11 per cent last month due to a new infrastructure cess announced in the Budget.
The downward revision follows a growth of 7.24 per cent in passenger vehicle sales in the country for the year ended March 2016.
This is the fastest pace of growth for the segment in the last five years since 2010-11 when it grew by 28 per cent. This growth was largely driven by new products and heavy discounts on existing car models.
The industry body expects motorcycle sales to grow at 0—3 per cent as against a decline of 0.24 per cent in sales during 2015-16.
For scooters, the expected growth rate is in the range of 17-19 per cent as against 11.8 per cent in the last fiscal.
Current Affairs 8th April, 2016 Highlights of Union Budget 2016-17 Highlights of Railway Budget 2016
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