Carmakers Expect Sales to Slow on Price Rises, Interest Rates Increases
Indian automakers expect passenger- car sales growth to slow from the fastest pace in at least six years because of higher prices and rising interest rates.
Sales may increase 18 percent this year, Pawan Goenka, head of the Society of Indian Automobile Manufacturers, told reporters in Mumbai today. Shipments jumped 31 percent to 1.87 million last year, according to the group, which represents all automakers in the country.
Tata Motors Ltd. and Volkswagen AG have both raised vehicle prices this month to help offset rising prices for steel and other materials. The central bank also raised interest rates six times last year in a bid to tame inflation in Asia’s second- fastest growing major economy.
“This is the biggest concern,” Goenka said about interest rates. “Any further increase will have to be passed on.”
December car sales surged 29 percent to 148,681, according to the group. Sales of trucks and buses increased 27 percent to 61,880. Two-wheeler sales climbed 31 percent to 1 million.
Tata Steel Ltd., Steel Authority of India Ltd. and JSW Steel Ltd., the nation’s biggest producers, may raise prices as much as 3 percent this quarter as demand rises, Nirmal Bang Securities Ltd. said Dec. 30.
Following is a table of annual passenger-car sales in India and growth rates:
Year Sales Growth Rate (in millions) (in percentage) 2010 1.87 31 2009 1.43 19 2008 1.20 2 2007 1.17 15 2006 1.02 20 2005 0.85 6.3 2004 0.8 NA
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