India’s auto parts industry to halve this financial year

Article by Christian Andrei, on September 2, 2011

For this financial year, the revenue growth for India's auto parts industry will probably be cut by as much as half due to the slowdown in domestic auto sales and a year-ago base that’s higher, according to the apex industry body.

For 2011-2012, the supplier sector is predicted to increase by 12% to 15% due to moderating business sentiment, a significant drop compared to the 33% growth seen in the previous fiscal year, when revenue increased to $39.9 billion due to a surge in auto sales. Srivatsa Ram, president of Automotive Components Manufacturers Association (ACMA), said that lower growth is expected.

Car sales were affected as credit has become more expensive due to the persistently high inflation in India, which has the second-fastest in the auto market worldwide after China, according to Autonews. Car sales in India have fallen 16% in July, the first decline in 2.5 years, after surging by 30% in 2010.

In the quarterly period that ended June, India’s economy expanded by 7.7%, its weakest in six quarters. It’s predicted to be even weaker due to the impact of interest rate increases, weak global conditions, and high inflation.

Since March 2010, the Reserve Bank of India has raised interest rates a total of 11 times. Several analysts expect the central bank to raise rates by an additional 25 basis points in its policy review on Sept. 16. For the Indian car market for FY2012 to 10% to 12%, the Society of Indian Automobile Manufacturers has reduced its growth estimate from 16% to 18%, as the demand has been down due to higher interest rates and increasing vehicle costs.

Topics: india

If you liked the article, share on:


Login or Create new account to add a comment!


Mitsubishi is now officially part of the Renault-Nissan alliance after Nissan took over the Japanese car company recently. We know a lot has been happening in the car industry, but...
by - October 24, 2016
Driving the newest 2017 BMW 5-Series (G30), Clive Owen (Closer, Children of Men) returns to his role as “The Driver”. In this latest installment, what initially starts as a simple...
by - October 24, 2016
Many had wished that a Lamborghini Huracán Superleggera would somehow make a surprise debut at the recently held Paris Motor Show. Sadly, not a single Lamborghini appeared anywhere in sight....
by - October 24, 2016
Aston Martin and Red Bull Racing teamed up for the first time in creating what looks like one of the most ferocious beasts in history. The British car manufacturer has...
by - October 24, 2016
German premium carmaker Audi is reportedly planning to buy back around 25,000 Audi Q7 SUVs powered by its 3.0-liter V6 TDI engine in the United States. The buyback should compensate...
by - October 24, 2016