SIAM lowers FY13 industry growth forecast again, from 5-7% to 3-5%

New Delhi, January 9, 2013: The Society of Indian Automobile Manufacturers (SIAM) has once again lowered its growth forecast for the automobile industry for 2012-13 from 5-7 percent (announced in October 2012) to 3-5 percent in view of the continuing high interest rate regime, rising input and fuel prices and the volatility in exchange rates. In its initial FY13 growth forecast (announced in April 2012), SIAM had estimated growth to be 10-12 percent.

Speaking at a media meet in the capital today, S Sandilya, president, SIAM, said the industry is now banking on the annual Union Budget 2013-14 to bail it out from its falling fortunes. It will help if certain recommendations made by the industry are accepted by the government, SIAM said. These include extending the Automotive Mission Plan from 2016 to 2026 as there is likely to be a shortfall of $35 billion as against the targeted $145 billion. SIAM plans to appoint a consultant to work out a revised turnover target for the year 2026. The apex industry body also wants the government to extend support to the auto industry till 2026. It has also called for a reduction in interest rates, increased infrastructure spending, restarting of government buying of buses, increased economic activities, opening up of the mining sector and controlling inflation through supply side improvements (free movement of goods). Deregulating diesel prices will also help shift demand from diesel cars to petrol and is a must.