The Hindu Business Line : Passenger cars, scooters stay buoyant: Survey

The automotive industry maintained buoyant growth fuelled by certain segments compared to some other sectors which were affected in the current fiscal stated the Economic Survey.

Presenting its outlook, the survey said that the automotive industry which suffered from a significant slackening in growth as interest rates curbed demand, noted that segments including passenger cars, jeeps, scooters and mopeds buoyed during the current fiscal as on November 2007.

Mixed growth

The survey stated that the automobile industry’s growth had been pulled mainly by passenger car segment production that posted an increase of 15.6 per cent and scooters and mopeds by 18.9 per cent. However, the motorcycle production registered a 10.6 per cent decline and 6 per cent drop was reported in case of auto rickshaws during April-November 2007.

Overall, the Economic Survey reckons automobile production in April-November 2007-08 to be lower by 3 per cent. It has reported dip in passenger car production to 9.12 lakh from 13.23 lakh, commercial vehicles to 3.39 lakh from 5.20 lakh and two-wheelers to 5.39 lakh from 8.44 lakh in this period.

Exports, imports

In case of exports during April-November 2007, the industry grew at 17.39 per cent, the survey pointed out. Automobile exports touched $2.76 billion as on November 2006-07, of which the passenger cars constituted 15 per cent, commercial vehicles slightly lower at 10 per cent , three-wheelers with the largest share of 26 per cent and 7 per cent by two-wheelers. This increased from $1 billion in 2003-04. But the auto component industry emerged as a net importer with India’s imports growing at a rapid pace of 34 per cent against exports at 16 per cent in 2006-07.

The gap between the growth of auto components exports and imports has widened compared to 2003-06 when exports grew at a CAGR of 29.07 at $2.9 billion, marginally at a lower rate against imports that grew at 31 per cent to $3.33 billion.

“In the current liberalised duty regime, the challenge faced by the industry is to innovate and upgrade continuously to remain competitive in the international market,” it said. The contribution of the auto component sector grew to $15 billion in 2006-07 compared to $3.1 billion in 1997-98 reflecting the quality of the products, it stated.

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