Carmakers upbeat on FY17 growth prospects

The upbeat passenger vehicle industry showcased a series of products on the first day of the Auto Expo 2016, eyeing a double-digit growth in the next financial year when actual sales for most of the new vehicles will begin. The sales of passenger cars, utility vehicles and vans have grown nine per cent in the first nine months of the current financial year on the back of new launches, decline in interest rates and benign fuel prices.

Kenichi Ayukawa, managing director and chief executive officer at the country’s largest car maker Maruti Suzuki, said he expected the company to keep clocking a double digit growth in the near future. A double-digit growth by the company with 47 per cent market share will translate into a high growth for the overall industry. The company on Wednesday unveiled its new compact sports utility vehicle, Vitara Brezza, which will be launched in March-April this year.

Leading utility vehicle Mahindra & Mahindra, which last month launched its compact SUV, KUV100, is optimistic about the industry growth next year. “I am optimistic about seeing a double digit growth in the next financial year. We have had around 8 per cent growth so far this year. A lot of products have been launched. It is a good time to buy. Vehicles are affordable and interest rate is not a disabler. There are a lot of options. The consumer is spoilt for choice. Low fuel prices make cost of ownership low. I will be very surprised if it is not double digit,” Pawan Goenka, executive director at Mahindra & Mahindra told Business Standard.

The Indian passenger vehicle industry is recovering in volumes though far from the earlier peak sales of 2012. “The uncertainties in the market are adding to volatility in growth, especially on account of emission and fuel disparity. We estimate the growth to be around 8 per cent. An early introduction of GST and land acquisition laws could improve investment climate and accentuate the growth further,” said Rakesh Srivastava, senior vice president (sales and marketing) at Indian arm of Korean auto major Hyundai, the second largest domestic player.

Hyundai is bullish on maintaining the growth rate through product portfolio enhancement and is eyeing record domestic sales of 500,000 units in 2016.

GM India, which showcased the compact sedan Essentia, is also hopeful of enjoying a growth run in the Indian market. The American company has been struggling to post a growth in the Indian market in recent years. Kaher Kazem, who recently took over as the president and managing director of GM India, said the company, is confident of doing well in India.  “We have got a clear plan on how to improve our market share. We will be investing in new products”, he said.

India is one of the few countries to witness a high single digit growth for last few months, though on a smaller base compared to markets like France, Britain, China and Germany. Global car makers are eyeing a greater pie of the Indian market. “Considering the growth in the Indian automotive market global companies have realised they need to have a very credible strategy on product development, distribution, service and export. It will be difficult for these auto majors to increase their volumes without growing in India”, said Abdul Majeed, partner at Price Waterhouse and an auto expert.